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TD Cowen Gives Stablecoin Yield Ban 10% Odds as Banks Plan Push in Democrat-Led Congress
TD Cowen's Jaret Seiberg puts only a 10% chance on a congressional ban on platform stablecoin yield over the next two years, even as banks renew their push after Democratic midterm wins.
Brief
Banks intend to renew their effort to bar exchanges and similar venues from paying returns on dollar-pegged stablecoin balances in the next Congress, according to a Monday policy note from TD Cowen analyst Jaret Seiberg. The dispute centers on whether trading venues can reward users who keep stablecoins on their platforms. The note links the renewed push to a Senate shift, with crypto advocates retiring or losing seats while skeptics gain prominence, including Sen. Elizabeth Warren, who is likely to chair the Banking Committee. The GENIUS Act, signed in July 2025, bars payment stablecoin issuers from paying yield simply for holding a balance, but it does not explicitly cover exchanges, a gap banking groups call a loophole. Bank trade groups have urged Congress to close it.
Why it matters: Because stablecoins play a central role in bitcoin trading on exchanges, the result could shape how platforms attract dollar balances.
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Crypto market structure bill fails in Senate, shifting focus to stablecoin yield
Terms in this story
- Stablecoin
- A token designed to track a reference value, usually the US dollar, through reserves, crypto collateral or an algorithm.
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