Are Banks Blocking Stablecoin Yields to Protect Profits?

[etfs]

Omid Malekan, a lecturer and adjunct professor at Columbia Business School, argues that the US banking industry is promoting “myths” about stablecoin yields to protect its own profits. According to Malekan, delays in crypto market structure legislation are increasingly tied to a single issue: whether stablecoin issuers should be allowed to share yield with users.

At the center of the debate is what Malekan calls a “yield bottleneck”—who gets to earn the interest generated from stablecoin reserves. Banking lobbies frame this as a dangerous loophole, warning of mass withdrawals from traditional savings accounts. Malekan counters that these fears are largely unsubstantiated and distract lawmakers from focusing on consumer benefits and financial innovation.

[cryptoenthusiast]

“dangerous loophole” usually just means someone else might get paid instead