Banks are lobbying to kill crypto rewards to protect a hidden $1,400 “tax” on every household
The post Banks are lobbying to kill crypto rewards to protect a hidden $1,400 “tax” on every household appeared on BitcoinEthereumNews.com.
Banks are fighting stablecoin rewards to protect a secret $360 billion revenue machine. When Coinbase chief policy officer Faryar Shirzad posted a thread on Jan. 8 warning that stablecoin rewards “remain under debate” as Congress marks up market structure legislation, he attached numbers that banking groups would rather keep quiet. US banks earn $176 billion annually on roughly $3 trillion they park at the Federal Reserve, and they collect another $187 billion from card swipe fees, nearly $1,400 per household. That’s over $360 billion in revenue from payments and deposits alone, and stablecoins with competitive yields threaten both streams at once. The GENIUS Act, signed in July 2025, bans stablecoin issuers from paying interest or yield “directly or indirectly.” Yet, exchanges route rewards through affiliate programs, treating them as loyalty incentives rather than interest. Banking groups call this a loophole. The American Bankers Association, joined by 52 state banking associations, sent a letter to Congress on Jan. 6 urging lawmakers to extend the ban to “all affiliated entities and partners.” The numbers tell a different story about who actually benefits from the current arrangement. Related Reading Trump signs GENIUS Act into law, activating America’s first regulatory framework for stablecoins In addition to sign the stablecoin framework into law, Trump vowed to approve the market structure bill next. Jul 18, 2025 · Gino Matos Hidden subsidy Banks hold reserve balances with the Federal Reserve totaling $2.9 trillion as of December 2025. The Fed paid $176.8 billion in interest on those reserves in 2023, gross income to banks before their own funding costs. Reserve balances existed in trivial amounts before 2008. Reserve balances held at Federal Reserve Banks jumped from near zero before 2008 to $2.9 trillion by late 2025. The Fed’s adoption of an “ample reserves” framework after quantitative easing created…
Filed under: News - @ January 10, 2026 9:26 pm