What is the stablecoin yield loophole?

The GENIUS Act bans issuers from paying interest directly. But crypto exchanges reward holders through third-party arrangements. Banks argue this circumvents the law's intent.

How much could banks lose to stablecoin migration?

The Bank Policy Institute estimates the GENIUS Act framework could drain $6.6 trillion from the U.S. banking system if deposits migrate to high-yield stablecoin alternatives.

How big is the stablecoin market?

Total market cap reached $317.8 billion. Tether's USDT holds $187 billion. Circle's USDC grew 73% year-over-year to $75 billion.

What happens if Congress closes the yield loophole?

Stablecoins could lose appeal as savings alternatives. Adoption may slow. Critics warn it could also push users toward China's interest-bearing digital yuan.

Stablecoin Yields Face $6.6 Trillion Showdown as Banks Target GENIUS Act Loophole

Lukas

Jan 9, 2026

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6 min read

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Bank Deposits Crypto Yields GENIUS Act Stablecoin Market Stablecoin Yields

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