The post Banks Risk Fueling Tether’s Grip, Blocking Stablecoin Rewards appeared on BitcoinEthereumNews.com.

Coinbase CLO warns banks that banning stablecoin rewards could strengthen unregulated Tether’s $187B market dominance amid policy standoff. Coinbase’s Chief Legal Officer, Paul Grewal, issued a stark warning this week. Banks blocking stablecoin rewards might accidentally hand more power to Tether. The warning came through a post on X, where Grewal stated: “The irony for banks is that if they poison CLARITY with a US rewards ban, this is how stablecoins will actually poison them.” White House meetings between Wall Street bankers and crypto executives hit a wall. President Trump’s administration pushed for compromise. Banks refused to budge on their position that no stablecoin yield or reward is acceptable, according to CoinDesk. The bankers argued that such yields threaten the depository activity at the heart of U.S. banking system. They laid out their stance in a one-page paper titled “Yield and Interest Prohibition Principles.” Must Read: Coinbase CEO Confident a Crypto Market Framework Can Benefit Everyone Digital Chamber Fires Back The Digital Chamber responded Friday with its own principles document. CEO Cody Carbone told CoinDesk they want to make the case for policymakers. The industry group’s document defends the Senate Banking Committee’s draft bill. That bill outlines situations where rewards could be acceptable. The Chamber said it’s willing to give up ground on anything resembling interest payments for static stablecoin holdings. But they want to keep rewards for transactions and other activities. Carbone suggested bankers should return to the negotiating table. “If they don’t negotiate, then the status quo is that just rewards continue as-is,” Carbone said. He noted his group’s membership includes banking members, putting them closer to the middle of the discussion. The crypto industry has been pursuing stablecoin products allowed under last year’s GENIUS Act. Banks are trying to dial back that law with edits in the…

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Filed under: News - @ February 15, 2026 4:26 pm