Nic Puckrin, investment analyst and co-founder of Coin Bureau.
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The last few weeks have seen a fierce debate in Washington between crypto firms and banks over a contentious bill that will define the future of crypto regulation. The key issue in question – whether crypto service providers should be allowed to pay yields on stablecoins – has had the talks at a stalemate.
But what’s most notable here isn’t the disagreement – it’s the fact that banks and crypto firms are discussing various compromise options to move the debate forward. This marks a clear shift in the relationship between the traditional financial and digital asset industries – from the “us versus them” mentality that has prevailed since the birth of Bitcoin back in 2009, to a new reality focused on cooperation. This isn’t a temporary détente, but rather a signal that stablecoins are now too systemically important for either side to ignore.
After weeks of talks that saw crypto incumbents – notably leading digital asset exchange Coinbase – reject the proposed bill that would ban stablecoin yields, the compromise that is being floated now reveals a vision of the future where crypto firms and banks would work together to make the most of the advantages stablecoins offer.
Why stablecoins matter
These advantages are many. Stablecoins have seen staggering growth over the last year, with their market cap soaring around 50% past $300 billion last year, while transaction volume skyrocketed 75% to $33 trillion in 2025. And in January 2026, monthly transaction volume jumped further to $10 trillion. By some projections, the stablecoin market could grow to anywhere between $1.9 trillion and $4 trillion by 2030, so their strategic importance is only set to increase.
Their rapid growth has also supercharged earnings of stablecoin issuers, with Tether – the issuer of USDT, the largest stablecoin on the market – reporting $5.2 billion in revenues in 2025, roughly a quarter of JP Morgan’s 2025 revenue for comparison. Stablecoins show the best product market fit in digital assets beyond Bitcoin ETFs – they facilitate instant, cheap, cross-border settlement and generate tangible revenues – so it’s no wonder they have attracted so much attention.
But that’s not the reason that banks are fighting so hard for control over the Clarity Act. Rather, it’s the threat that stablecoin yields pose to traditional bank deposits. While average US savings accounts pay 0.39% and checking accounts a mere 0.07%, many crypto exchanges offer yields upwards of 3.5% on major stablecoins. It makes sense that banks are concerned about deposit flight. The US Treasury estimates that up to $6.6 trillion in bank deposits could potentially be at risk.
Defending the dollar
However, competition from stablecoins is no longer something banks can wish away. Stablecoins aren’t just a crypto innovation. They are becoming strategically and systemically important for the wider financial ecosystem – and especially for the United States, which is grappling with a declining dollar.
The DXY index, which tracks the greenback’s value against a basket of global currencies, is down 9.5% over the past year. At the same time, foreign ownership of US debt has been declining as part of the so-called “sell America” trade – down from around 50% in the 2010s to 30% today, led by the People’s Bank of China.
In this context, stablecoin issuers offer key support. Tether is now the 18th largest holder of US treasuries in the world, having increased its exposure by $6.5 billion in Q4 2025. Regulating stablecoins would require all issuers to hold US treasuries, or other dollar-denominated assets – a quiet but powerful support for the greenback.
The growing use of stablecoins also exports the dollar and subtly reinforces its dominance in foreign nations, such as Turkey, Nigeria or Argentina, where individuals have been turning to stablecoins to shield their assets from rampant inflation. After all, to date, 99% of stablecoins are pegged to the US dollar.
From stalemate to solution
So, simply put, the US needs stablecoins, and it therefore needs the Clarity Act to succeed. For this to happen, crypto and “TradFi” have no choice but to start working together – and the proposals by crypto firms to involve community banks in the solution could be exactly the move that breaks the current impasse.
Community banks are an important player in this debate. While smaller than major institutions, they hold real clout in Washington, and have a vested interest in making better use of stablecoins as they are more exposed to the looming risk of deposit flight. But, on the plus side, they are also more nimble and able to incorporate existing solutions into their infrastructure, where larger institutions are burdened by legacy systems and tend to focus on building solutions in-house.
In practice, community banks could act as regulated reserve holders for stablecoin issuers, while the technology and distribution is handled by crypto incumbents. They could also partner with stablecoin issuers to create their own tokens on a white-label basis, intended for local businesses or SME clients.
While crypto native firms bring years of technical expertise, banks contribute compliance, political legitimacy and balance-sheet strength. Through cooperation, both sides of this debate could achieve more than they would be able to on their own. In this case, the whole really is greater than the sum of its parts.
That isn’t to say that reaching an agreement will bring this debate to an end – on the contrary, it would merely mark the beginning. Hashing out the details and moving into the implementation phase will take years, and the devil, as they say, will be in the details.
But that is precisely why it is so important for crypto firms and banks to find a solution as soon as possible. The longer the Clarity Act remains stalled, the more detrimental the uncertainty becomes for the future of the financial system. When it comes to stablecoins, even partial clarity is far better than no clarity at all.
About the author
Nic is an investment expert and passionate advocate of cryptocurrency and blockchain technology. He began his career in a quantitative role at Goldman Sachs, but was attracted by decentralized and permissionless finance. Soon becoming an experienced entrepreneur and investor, Nic founded Coin Bureau in 2017, which publishes independent crypto-educational content and analysis. Today, Coin Bureau operates several media assets, including the largest crypto-focused YouTube channel in the industry, with over 2.6 million subscribers.
