Crypto yields expose the exact amount banks are underpaying you, and why they want Congress to ban it
While Congress pushes forward with the CLARITY Act, the unfinished combat over how the U.S. attracts the line between “crypto” and “securities” is spilling into public view, and into a well-known blame recreation.
Online, critics argue the invoice’s construction might hardwire benefits for regulated incumbents, with centralized platforms accused of quietly backing tweaks that will make it more durable for DeFi to compete on equal phrases.
CLARITY is being offered as a market-structure invoice, however the most consequential battle could also be over distribution.
Stablecoin rewards flip “holding {dollars}” right into a competing product class, and banks are preventing to preserve that characteristic from turning into normalized outdoors the deposit system. Platforms body it as a loyalty perk somewhat than curiosity, whereas lawmakers search for language that preserves “digital money” whereas limiting “hold-to-earn” habits.
Banks are resisting retail stablecoin yield as a result of it competes with deposit pricing and the fee relationship that underpins client banking.
According to the FDIC’s most up-to-date Monthly Rate Cap Information dated Dec. 15, 2025, the nationwide charges utilized in its rate-cap framework have been 0.39% for financial savings, 0.07% for curiosity checking, and 0.58% for cash market deposit accounts.
In the identical desk, the Treasury reference yield for these non-maturity merchandise was 3.89%.
That hole will not be a direct proxy for financial institution revenue, however it quantifies how far retail deposit pricing can sit under authorities charges when buyer habits, bundled companies, and switching friction preserve balances in place.
| FDIC class (Dec. 15, 2025) | National deposit charge | Treasury reference yield | Gap |
|---|---|---|---|
| Savings | 0.39% | 3.89% | 3.50% |
| Interest checking | 0.07% | 3.89% | 3.82% |
| Money market deposit account | 0.58% | 3.89% | 3.31% |
Stablecoin yields put strain on financial institution deposit charges, and expose the unfold
Stablecoin rewards compress that distance by giving retail customers an alternate place to maintain greenback balances with a return that may sit close to the brief finish of the curve.
The U.S. Treasury’s daily yield curve series reveals the three-month level at 3.88% on Nov. 28, 2025, inserting the market’s money benchmark shut to the FDIC desk’s 3.89% reference.
A stablecoin yield close to that vary modifications the retail query from “Which financial institution pays the most?” to “Why is my money return far under the authorities charge?”
From a stability sheet perspective, the strain is forward-looking as a result of the resolution level is marginal funding price, not legacy averages.
If deposits migrate out of checking and financial savings into stablecoin balances, banks can reply by elevating deposit charges or changing funding by wholesale channels.
Both paths elevate curiosity expense, and they can accomplish that rapidly.
According to the Federal Reserve Bank of New York, the Secured Overnight Financing Rate is a broad measure of the price of borrowing money in a single day collateralized by Treasury securities, a benchmark that shapes repo and different short-term funding markets utilized by giant monetary corporations.
When retail deposit outflows push banks to rely extra on market funding, the worth of that substitute can observe coverage charges extra immediately than retail deposits have traditionally finished.
The retail distribution layer is the place banks see the largest strategic threat.
The hidden price of upper financial institution funding reliance: why deposit flight issues
According to Coinbase’s USDC Rewards overview, the program is a Coinbase-funded loyalty program, rewards accrue primarily based on stability and the rewards charge, and Coinbase says it doesn’t use or lend USDC with out buyer instruction.
The identical web page notes that, in a number of areas together with the United States and United Kingdom, eligibility requires a Coinbase One membership.
Coinbase’s USDC product page lists a 3.50% rewards charge and says USDC rewards are obtainable to Coinbase One members, with plans beginning at $4.99 monthly.
Even when the exact reward charge is variable over time, applications like this current yield as a default characteristic of holding a cash-like stability on a platform that additionally helps transfers and buying and selling.
That reduces the function of a checking account as the major place to park {dollars}.
Banks additionally distinguish between sustained yields and promotional presents as a result of the former can reset client expectations whereas the latter typically behave like advertising spend.
Binance has run time-bound campaigns tied to its Simple Earn product.
According to a Binance announcement, one promotion provided a bonus tiered APR on USDC versatile merchandise on prime of a real-time APR element.
A separate Binance notice states that property deposited in Simple Earn could also be loaned to different Binance customers, together with margin and mortgage merchandise.
It additionally notes that giant redemption requests can delay redemptions briefly.
For banks, that disclosure issues as a result of it attracts a line between a rewards charge funded by platform economics and a financial institution deposit funded inside a supervisory framework.
Still, each compete for the identical retail {dollars}.
Stablecoin rewards threaten banks’ deposits, and the buyer relationship that comes with them
Opposition additionally displays the funds and relationship layer that sits on prime of deposits.
Checking accounts anchor payroll, invoice pay, debit, ACH, and payment strains, and they assist cross-sell into lending and wealth administration.
If a share of transactional balances shifts to stablecoins held in custodial wallets, banks threat shedding each funding and buyer interplay.
That outflow might be extra responsive than conventional deposit competitors as a result of transfers can settle in any respect hours with out the identical batch constraints as legacy rails.
Regulation has begun to body how far stablecoins can go on yield, and CLARITY is turning into the car for a combat GENIUS didn’t settle cleanly.
The GENIUS Act method barred issuers from paying curiosity so as to preserve stablecoins outlined as “digital money,” however platforms can nonetheless market “rewards” that perform like yield, shifting the aggressive impression into distribution.
CLARITY debate attracts a line between “yield” and “loyalty” as stablecoin rewards come underneath hearth
In the background is a narrower however extra explosive drafting dispute: lawmakers are searching for language that bars curiosity paid merely for holding a stablecoin, whereas nonetheless permitting activity-based incentives framed as funds or loyalty rewards.
That distinction issues as a result of it shifts the combat away from issuers and onto distributors: platforms can market a cash-like stability with a near-Treasury return with out the token itself being labeled “interest-bearing,” and banks argue that’s functionally deposit curiosity by one other identify.
The result’s an try to cap “hold-to-earn” expectations whereas leaving room for “use-to-earn” applications, plus disclosures designed to cease rewards from being offered as risk-free bank-style curiosity.
The near-term math banks observe will not be the unfold between a Treasury yield and a single deposit charge.
It is the mixture of deposit retention, deposit repricing, substitute funding, and how rapidly these inputs can change if stablecoin rewards stay close to money benchmarks.
The FDIC’s Dec. 15, 2025 schedule lists 0.07% for curiosity checking and 0.39% for financial savings towards a 3.89% Treasury reference yield.
Meanwhile, Coinbase’s USDC web page lists 3.50% rewards for Coinbase One members, and Binance disclosures describe each promotional bonus buildings and the capability to lend Simple Earn property to different customers.
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