TD Cowen: Banks may struggle to win the stablecoin yield battle, but a prolonged stalemate could jeopardize US crypto legislation.

Investment bank TD Cowen suggests that while the banking sector may ultimately be at a political disadvantage in the policy debate surrounding stablecoin yields, ongoing industry maneuvering could slow down or even threaten the progress of the U.S. crypto market structure bill. Jaret Seiberg, Managing Director of TD Cowen's Washington research division, noted in a report that the banking sector's opposition to stablecoins offering yields to users is essentially an opposition to consumers receiving additional returns, making it difficult to maintain a long-term political advantage. However, if this controversy continues to escalate, it could affect the passage of the Clarity Act (Digital Asset Markets Clarity Act). This analysis comes as the Office of the Comptroller of the Currency (OCC) is proposing specific rules for implementing the GENIUS Act (Stablecoin Act). According to the proposal, stablecoin issuers are explicitly prohibited from directly paying interest or yields to holders. Furthermore, if issuers coordinate with affiliated entities to have third-party platforms pay stablecoin yields to users, this could also be presumed illegal. The OCC stated that it will conduct case-by-case assessments and open a 60-day public comment period for the relevant rules.