🪙 Can Stablecoin lobby still cut a deal?

The crypto industry is circling the wagons again. But this time, it’s not regulators or lawsuits forcing their hand, it’s the banks.

After clearing the House last year, the much-watched U.S. crypto market structure bill has hit a Senate wall. Progress has frozen over one core issue: stablecoins. More specifically, who gets to offer yield on them, and who doesn’t.

At first glance, it might seem like a niche standoff over digital dollars. But behind the scenes, it’s a power struggle over how money works in the digital age. And both sides know exactly what’s at stake.

The fault line: stablecoin rewards

And for old-school banks, the notion that firms like Coinbase and Kraken can pay interest on stablecoins: without banking licenses or deposit insurance or reserve requirements is downright nerve-racking. It’s existential.

To them, it appears to signal the creation of a “parallel banking system.” One that offers yield. One that can scale globally. And one that doesn’t play by them.

Earlier this week, crypto companies and bank lobbyists were in high-stakes, and increasingly tense negotiations at the White House. The bill is widely popular, and it’s easy to see why. Everyone agrees clarity is overdue. But there is no consensus on how to deal with rewards.

Banks say: kill them.

Crypto firms respond: regulate them, don’t ban them.

No deal was reached.

Crypto’s latest move: give banks a piece of the pie

Now, in an attempt to break the gridlock, several crypto players are offering new concessions. 

Among them:

• Letting community banks hold stablecoin reserves

• Opening the door for co-issued stablecoins between fintechs and banks

• Exploring joint models that blend DeFi incentives with traditional oversight

It’s a strategic shift, not unlike PayPal’s playbook when it entered financial services by partnering with banks instead of fighting them. The idea is simple: if banks feel less threatened, the bill might get moving again.

But the compromise comes with risk. Not all crypto firms agree with handing over more power to the same institutions they once vowed to replace.

The race against time

While Washington bickers, the rest of the world is moving on.

• Europe’s MiCA is live.

• Fidelity’s FIDD just launched on Ethereum.

• U.S. Treasuries are flooding stablecoin reserve sheets.

• Even Tether, for all its criticism, just posted billions in profit mostly from traditional assets backing its tokens.

And that’s the paradox: stablecoins are still pegged to old money. But who controls the rails, and who captures the yield could determine how the next chapter of digital finance unfolds.

Anthropic just set off the year’s biggest billionaire bloodbath.

On Tuesday it released a new AI tool for legal teams, and the market freaked out. In a single day, LegalZoom fell about 20%. That move didn’t stay isolated. It set off a wider software selloff that erased $62 billion from the fortunes of America’s wealthiest tech founders.

Adam Foroughi, the chief executive of AppLovin, whose $7.8 billion drop was the greatest percentage loss suffered by any American billionaire in 2026. His two co-founders were not far behind. Workday’s share co-founder Dave Duffield saw his company dip to its lowest level in 3 years. And Oracle’s Larry Ellison shed almost $40 billion.

The S&P North American Software Index fell 15% in January, its worst monthly performance since 2008. And things haven’t stabilized. Coinbase CEO Brian Armstrong has fallen 44% since October, similar to Bitcoin’s fall. The pain is even hitting private equity names like Orlando Bravo.

It took one A.I. tool to put the software industry on edge. Investors didn’t interpret it as a product launch, but rather a paradigm shift. Automation has just swallowed another high-margin industry.

• A16Z: Blockchains to become key in vetting AI agents and impersonation

• Bhutan sells over $22M in Bitcoin as prices plunge and mining costs rise

• A16Z: Blockchains to become key in vetting AI agents and impersonation

• Over 80% of 135 Ethereum L2s record below 1 user operation per second

• xAI is giving away $1 million in prize to creators, to make a short video ad about Grok using Grok Imagine 1.0.

Join the Conversation!

We'd love to hear your thoughts and comments. Join our community and stay updated with the latest trends and discussions in crypto.

Twitter | Instagram | Telegram Channel | Linkedin | Facebook