U.S. banks and credit unions have joined forces to reject reward payments for holding cryptocurrency stablecoins.
The rejection comes with the Digital Asset Market Clarity Act, a proposed regulatory framework for digital assets, working its way through the U.S. Congress.
Credit unions and banks say they are unwilling to pay rewards or interest on holding stablecoins such as USDC that is issued by Circle Internet Group (CRCL).
The rejection of stablecoin rewards sets up a fight between crypto firms and major U.S. financial institutions such as Morgan Stanley (MS) and Citigroup (C).
For now, it looks like the banks and credit unions are winning the battle.
The U.S. Senate has released an updated draft of the Digital Asset Market Clarity Act that now prohibits the payment of “any form of interest or yield” solely for holding stablecoins.
Crypto firms and stablecoin issuers such as Circle are lining up to challenge the revised legislation before a final vote on it occurs in the U.S. Senate.
Prediction markets are currently betting there’s an 80% chance of the legislation being signed into law this year.
The fight over stablecoin rewards comes with Bitcoin (BTC) up about 1% in the past 24 hours and trading at $92,000 U.S.
