Blockchain Association Urges US Legislators For Crypto Client Rewards
The Blockchain Association, a non-profit crypto advocacy organization, has written a letter signed by more than 125 crypto industry groups and companies to the US Senate Committee on Banking, opposing the ban on third-party service providers and platforms offering stablecoin holders customer rewards.
Expanding the ban on stablecoin issuers outlined in the GENIUS stablecoin regulatory framework to include third-party service providers would stifle innovation and lead to “significant market concentration,” the letter said.
The letter compared rewards offered by crypto platforms to those offered by credit card companies, banks and other traditional payment providers.
According to the Blockchain Association, banning crypto platforms from offering similar rewards to stablecoins would give incumbent financial service providers an unfair advantage.
“If these types of payments cannot compete on a level playing field with other payment methods, the potential benefits of payment stablecoins will not be realized. Rewards and incentives are a normal feature of competitive markets.”
The Blockchain Association has issued several statements and letters opposing efforts to prevent crypto platforms from sharing with customers the opportunities they offer products that can help consumers improve pricing.
RELATED: Bank of Canada sets stable coin criteria for ‘good money'
FDIC clears way for banks to issue stablecoins, industry group says stablecoins are not a risk
The Federal Deposit Insurance Corporation (FDIC), the US regulatory agency that oversees and guarantees the banking sector, published a proposal on Tuesday that would allow banks to issue stablecoins at branches.
Under the proposal, both the bank and its stablecoin subsidiary would be subject to FDIC rules and financial worthiness reviews, including reserve requirements.
The Blockchain Association continues to push back against claims that producing stablecoins and sharing rewards with customers will jeopardize the banking sector and bank lending.
“Evidence does not support claims that stablecoin rewards threaten community banks or creditworthiness,” said the Blockchain Association, saying it is difficult to make the case that bank lending is limited by customer deposits.
However, the banking industry has resisted sharing the yield with customers on stablecoins and crypto platforms that offer products, fearing that interest in digital asset products will erode banks' market share.
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