A major fight has emerged between traditional finance and the cryptocurrency industry over regulation.
Banking institutions have been pushing against stablecoins, arguing that they would drain deposits.
However, crypto advocates claim that banks are actually concerned about losing profits.
Why banks might be worried
Faryar Shirzad, chief policy officer at cryptocurrency exchange giant Coinbase, claims that the hostility from banks is all about protecting a staggering $187 billion worth of fees that they are getting from payment-related fees.
If stablecoins end up gaining widespread mainstream adoption, people might avoid using the payment rails offered by banks, thus depriving them of the massive profits.
Coinbase and other crypto lobbyists argue that stablecoins are primarily used as payment tools. Thus, there is no evidence that they will cause some sort of deposit flight.
Backtracking on the GENIUS Act
Even though the banking sector initially supported the GENIUS Act, they later ended up backtracking on it.
Crypto lobbyists now claim that stablecoins are the latest innovation that banks are trying to slow down after previously opposing ATM machines and online banking.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team
