Sen. Angela Alsobrooks (D-Md.) called for a compromise on the issue of stablecoin rewards on Tuesday, emphasizing that perfect should not be the “enemy” of the good.
No Concessions On Interest On Idle Balance
Speaking at the American Banking Association Summit, Alsobrooks expressed firm support for the banking industry and pledged to take necessary steps to prevent “deposit flight” from these institutions.
“It’s really important that we do not allow payment on a [stablecoin] balance that would cause deposit flight.” Alsobrooks, also a member of the Senate Banking Committee, stated. “So, making sure that we are not allowing bank-like products without bank-like protections.”
A ‘Compromise’ On The Way?
However, she underscored that perfection should not be allowed to become the “enemy of the good.”
Alsobrooks said that she and Sen. Thom Tillis (R-N.C.) are working on a “compromise” that aims to have adequate “guardrails” in place while fostering innovation at the same time.
Stablecoin rewards have become a big sticking point in the cryptocurrency market structure legislation.
Coinbase Global Inc. (NASDAQ:COIN) withdrew its support hours before lawmakers were set to vote on the legislation. The primary objection centers around a rule that would prohibit cryptocurrency platforms from paying rewards on idle stablecoin balances, which does not apply to traditional banks offering interest on dollar deposits.
A war of words ensued between Coinbase CEO Brian Armstrong and JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon, with each party demanding a “level playing field” in the financial landscape.
While Armstrong accused traditional banks of stifling competition, Dimon insisted that any crypto firm offering such yields should be subjected to banking regulations.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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