Section 4(a)(11) prohibits stablecoin issuers from offering yield while tokenized deposits face no such restriction. The White House CEA says the ban does 'very little' to protect bank lending — which might be the point.
- The GENIUS Act's Section 4(a)(11) prohibits stablecoin issuers from paying interest, creating a structural advantage for banks by allowing tokenized deposits to offer yield.
- While framed as consumer protection, the yield ban on stablecoins has minimal impact on bank lending according to the White House CEA, suggesting its primary function is to protect the banking sector.
- Banks are actively rolling out tokenized deposit solutions, positioning them to control the economics of the on-chain payment stack with yield-bearing capabilities that stablecoins lack.
Topics: Asset types, Legal regulatory, Banks bankingsystems, Stablecoins digital cash, Securities law classification, Custody asset servicing
Tags: #geniusact #tokenizeddeposits #stablecoins #yieldban #fdic #jpmorgankinexys #wellsfargo #coinbase #whitehousecea #banklending