US lawmakers resist yield-bearing on stablecoins

The US House Financial Services Committee Chair French Hill hits back at crypto industry leaders arguing for yield-bearing inclusion in stablecoin regulations. Hill stated that lawmakers view stablecoins as a payment solution, not an investment product.

Rep French Hill responds to stablecoin demands from crypto industry members

House Financial Services Committee Chair French Hill clarified that House members have no consensus on including yield-bearing for consumers in stablecoin legislations. In a briefing on Monday, Hill shared that lawmakers view stablecoins as a means of enhancing payment and not an investment product.

Hill's statement responds to recent comments from crypto community members regarding stablecoin legislation in the House and Senate. Industry leaders, including Coinbase CEO Brian Armstrong and Bitwise executive Matt Hougan, earlier appealed to the Senate and House to include provisions in their bill for consumers to earn interest on stablecoins.

"I hear the point of view, but I don't think there's consensus among the parties or the houses on having a dollar-backed payment stablecoin pay interest to the holders of that stake," said French Hill in an interview. 

The House's STABLE bill is set for a markup on Wednesday, where committee members will review, debate and propose amendments to it before it is finalized for further consideration.

Circle's Chief Strategy Officer, Dante Disparte, showed support for the swift bipartisan passage of the STABLE bill. He emphasized that the bill offers clear guidance on reserving, trust, transparency and financial crime compliance.

"The US will win when payment stablecoins that reference the dollar have a clear pathway to enter into the United States' regulatory perimeter. We urge swift and bipartisan passage of the STABLE Act," Dante stated in a Tuesday X post.

However, several crypto community members shared contrary remarks to lawmakers' decision, citing that the absence of yield-bearing would stifle innovation.

"Without yield, this isn't financial innovation — it's just banking as usual, but with a blockchain wrapper," said crypto lawyer Carlo D'Angelo.

Chris Pavlovski, CEO of RUM, also expressed dissatisfaction with the response from the House, stating that the STABLE Act is NOT America First.

"It's not even close. This is Wall Street, Coinbase & Circle first," he added in an X post.

The STABLE and GENIUS Acts bills do not mention interest for consumers holding stablecoins, stirring concerns about crypto's effectiveness.