Banks Vs Crypto Clash Deepens Over Stablecoin Yield As Bitcoin Holds $80K – Analysts Flag $250K ‘Supercycle’

• Senator Thom Tillis said lawmakers reached a bipartisan compromise to restrict interest-like stablecoin rewards while allowing alternative incentives under the CLARITY Act.
• Banking groups criticized the proposal, saying it “falls short” of protecting deposits, as debate over stablecoin yield intensifies.
• Industry figures pushed back, accusing banks of attempting to limit competition and user access to yield-bearing products.

As Bitcoin (BTC) holds above $80,000 for the first time in three months, tensions between the banking industry and the crypto sector are escalating over proposed rules governing stablecoin yields.

US Senator Thom Tillis said on Monday that lawmakers had reached a bipartisan compromise to address banks' concerns about deposit flight while still allowing crypto firms to offer alternative customer rewards, saying, “We respectfully agree to disagree.”

Tillis, speaking alongside Senator Angela Alsobrooks, explained that the proposal would prohibit stablecoin rewards from resembling interest on bank deposits, which he described as a core concern for the traditional financial system. 

Former Fox Business journalist Eleanor Terrett noted that the joint statement from Tillis and Alsobrooks signaled that the compromise was “likely final,” even as it faced pushback from banking groups. This was a part of the CLARITY Act, which aims to provide regulatory clarity for digital assets while balancing financial stability risks.

Banking Groups Criticize Stablecoin Yield Compromise

Banking groups, however, said the proposal does not go far enough and falls short of protecting bank deposits. Coinbase (COIN) Chief Legal Officer Paul Grewal said concerns around the bill’s language, particularly references to “economically or functionally equivalent” rewards, may be overstated, noting that such standards are commonly interpreted within existing legal frameworks.

Last week, Coinbase CEO Brian Armstrong called on lawmakers to proceed with a Senate markup of the CLARITY Act, even though the latest draft would place new restrictions on stablecoin reward structures.  Much of the debate, said Chief Policy Officer Faryar Shirzad, has also been driven by perceived risks rather than a clear understanding of how crypto works.

Bitcoin’s Supercycle Narrative Emerges

The debate comes as Bitcoin trades near levels approaching the average cost basis of spot exchange-traded fund (ETF) holders, estimated at around $82,000, with institutional investors largely holding positions despite periods of volatility.

Bitcoin’s price was trading at $80,798, up over 1% during the past 24 hours. On Stocktwits, the retail sentiment around BTC remained in the ‘bullish’ zone, while chatter around it moved to ‘high’ from ‘normal’ zones over the past day.

Separately, analyst PlanC explained that Bitcoin may be entering its first “supercycle,” noting the current cycle began at the November 2022 low of around $16,000. He said the asset has already reached an initial peak near $126,000 before correcting to a mid-cycle low around $60,000, and projected the next peak could arrive between the second half of 2027 and early 2028, with prices potentially exceeding $250,000.

Read also: Coinbase Teams Up With Kemet To Power ‘Everything Exchange’ For Institutional Traders

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