Yield-bearing stablecoins could kill banking — US Senator Gillibrand
Stablecoin issuers should be restricted from providing yield-bearing opportunities to protect the legacy banking system, which issues home mortgages and small business loans, US Senator Kirsten Gillibrand said at a summit in Washington, DC.
Speaking at the 2025 DC Blockchain Summit on March 26, the Democratic senator from New York praised her state for having some of the most robust financial regulations in the world, and said they should be adopted by all financial services sectors.
According to Gillibrand, these regulations need to be applied to stablecoin issuers, whether they are regulated at the state or federal levels, to ensure compliance with existing laws and to protect consumer safety. Gillibrand then turned her attention to protecting the banking industry:
“Do you want a stablecoin issuer to be able to issue interest, probably not, because if they are issuing interest, there is no reason to put your money in a local bank. If there is no reason to put your money in a local bank, who is going to give you a mortgage?
“If there is no deposit, small banks cannot do that anymore; it will collapse the financial services system that people rely on for their businesses and mortgages,” Gillibrand continued.
Senator Gillibrand speaking at a panel during the DC Blockchain Summit. Source: DC Blockchain Summit
Related: US stablecoin bill likely in ‘next 2 months’ — Trump’s crypto council head
Gillibrand is a co-sponsor of the GENIUS stablecoin legislation — a bill introduced by Senator Bill Hagerty in February that would establish a comprehensive regulatory framework for digital fiat tokens.
On March 10, Hagerty updated the bill to include stricter anti-money laundering provisions, know your customer (KYC) requirements, financial transparency regulations, and consumer protection controls.
The Senate Banking Committee advanced the GENIUS bill in an 18-6 vote on March 13. The bill must clear both chambers of Congress in floor votes before it hits US President Donald Trump’s desk for signing.
The GENIUS Act of 2025. Source: United States Senate
Critics of the GENIUS stablecoin bill say the legislation is a thinly veiled attempt to establish a central bank digital currency (CBDC) in the United States through privatized means.
Jean Rausis, co-founder of the decentralized trading platform Smardex, argued that centralized stablecoins provide avenues for financial censorship and state surveillance that could culminate in the government’s ability to turn off money or lock individuals out of the financial system.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
The government of India may consider stablecoin regulations in its Economic Survey 2025-2026, while the Reserve Bank of India (RBI) takes a “cautious” approach to crypto and pushes for a central bank digital currency (CBDC), revealing a divergence in policy recommendations.
The government will “present its case” for stablecoins in the annual report published by India’s Ministry of Finance, which outlines key policy recommendations and the state of the economy, business publication MoneyControl reported, citing an official familiar with the matter.
However, the central bank continues to urge a “cautious” approach to stablecoins, according to RBI Governor Sanjay Malhotra. Speaking at the Delhi School of Economics on Thursday, he said:
“We have a very cautious approach towards crypto because of various concerns that we have. Of course, the government has to take a final view. There is a working group which was set up earlier, and they will make a final call as to how, if at all, crypto is to be handled in our country.”
Malhorta dismissed concerns that India needs to respond to stablecoin innovation led by the United States, following the passage of the GENIUS bill in June, because India has a robust domestic digital payments infrastructure, unlike the US.
This includes the Unified Payments Interface (UPI), a 24/7 payments network, the National Electronic Funds Transfer (NEFT), which settles payments hourly and is also available 24/7, and the Real-Time Gross Settlement (RTGS) system for large transactions, Malhorta said.
The government of India regulating cryptocurrencies would mark a significant departure from its long-held anti-crypto stance and would legitimize digital assets in the world’s most populous country, spurring crypto adoption and potentially raising asset prices.
Related: Indian court steps in over WazirX XRP distribution tied to 2024 hack
Officials continue to cast doubt on “unbacked” cryptocurrencies
In October, Piyush Goyal, India’s minister of commerce and industry, said the government neither encourages nor discourages cryptocurrencies, but he also cast doubt on crypto as an asset class.
Most cryptocurrencies do not have sovereign backing or underlying assets that give them value, Goyal said.
Magazine: India mulls new crypto ban to support CBDC, Lazarus Group strikes again: Asia Express
Consulting company Cornerstone Research reported a significant drop in the number of enforcement actions implemented by the current leadership of the US Securities and Exchange Commission, compared to that under the previous administration.
In a report released on Wednesday, Cornerstone reported that, under SEC Chair Paul Atkins, the number of enforcement actions against public companies and their subsidiaries decreased by about 30% in fiscal year 2025 compared to those in fiscal year 2024.
The company said the data was “consistent with the general pattern for other fiscal years when the SEC administration changed,” referring to former Chair Gary Gensler.
Although the financial regulator dropped investigations and lawsuits against several crypto companies following Gensler’s departure, the report only referenced the SEC’s case against Coinbase, dropped in February.
Earlier this week, the SEC’s Division of Examinations released its examination priorities for the fiscal year through 2026, not mentioning cryptocurrencies or digital assets.
“The dismissal is consistent with the stated priorities of the current SEC administration,” said Cornerstone. “Chair Atkins has signaled that a ‘top priority’ of his administration will be ‘to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach.’”
Related: Crypto class actions on pace to nearly double in 2025
The SEC operated with limited staff for 43 days amid a US government shutdown that ended last week, curtailing its enforcement and oversight capabilities. Following its return to normal operations, the agency released its examination priorities for 2026 and continued reviewing applications for initial public offerings, exchange-traded funds, and other matters within its purview.
Awaiting market structure bill in Congress
As of Tuesday, Republican leaders on the Senate Banking Committee expected to pass a comprehensive bill on digital asset market structure by early 2026.
The initial timeline, anticipating the legislation being signed into law before the end of the year, was delayed by the government shutdown and pushback from Senate Democrats on DeFi provisions.
If passed, the law could grant the Commodity Futures Trading Commission significant authority to regulate digital assets. Atkins said that, under the SEC’s potential authority, it would not be “lax” on enforcement, likely including cases involving crypto.
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