TD Cowen’s Washington analyst Jaret Seiberg placed the probability of a congressional ban on stablecoin yield at just 10% for the next two years, according to a policy note shared with Bitcoin Magazine. The assessment comes as banking groups prepare to renew their push to stop crypto platforms from offering interest or rewards on dollar‑pegged stablecoins held by users.

Bank Lobbying Focuses on a Narrow Yield Ban

The American Bankers Association (ABA) and the Independent Community Bankers of America have urged lawmakers to treat platform‑generated rewards as prohibited interest, a loophole left open by the 2025 GENIUS Act. The act bars stablecoin issuers from paying interest for holding stablecoins but does not explicitly cover exchanges or other intermediaries, which banks argue could siphon deposits away from community banks and hurt local lending.

Political Landscape Reduces Legislative Prospects

Seiberg notes that while a 60‑vote Senate majority might be achievable on a narrow yield ban, broader crypto‑market reforms have stalled. The larger “Clarity Act” failed a cloture vote 49‑50 on September 15 and is considered effectively dead for this Congress after the Democratic midterm sweep. Moreover, Democratic senators are divided: Senator Elizabeth Warren is likely to chair the Banking Committee, while Senator Sherrod Brown, a long‑time critic, has returned to the Senate, but both face internal party disagreements over a yield‑only measure.

What to Watch Next

The next congressional session will reveal whether banks can isolate the yield issue from broader crypto regulation. Key indicators will include any formal bills introduced by the ABA or state banking associations, statements from Senate Banking Committee leadership, and reactions from crypto‑friendly lawmakers such as Senator Angela Alsobrooks, who supports reward structures tied to stablecoin usage rather than passive holding.