Wall Street Banks are Close to Losing a Major Lobbying Battle in the Republican-led Senate over Cryptocurrency Regulation, Highlighting the Growing Political Power of the Crypto Industry in Washington.
At the Center of the Dispute is whether Crypto Companies should be Allowed to offer Rewards Programs for Stablecoins that Resemble Interest-Bearing Bank Accounts. Banks argue these Programs could Pull Deposits away from Traditional Banks, especially Hurting Smaller and Rural Institutions. Crypto Firms say Banks are simply trying to Block Competition.
The Fight has Delayed a Major Bipartisan Crypto Bill that would create a more Industry-Friendly Regulatory Framework. Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) Brokered a Compromise that Bans Stablecoin Rewards if they Function like Traditional Bank Interest, while still Allowing some Customer Rewards. Banks say the Compromise is too Weak; Crypto Companies see it as an Acceptable Concession.
The Broader Story is that Crypto Lobbying is Rapidly Overtaking Wall Street’s Traditional Influence. Crypto Groups spent Hundreds-of-Millions during recent Elections, and now wield Enormous Political Leverage, while Banks are Scrambling to Respond with Increased Spending of their Own.
Despite Banks Benefiting from Trump (R) era Deregulation in other Areas, they have Repeatedly Lost Ground to Crypto Firms, which are gaining Regulatory Approvals and Deeper Access to the Financial System. Lawmakers Backing the Compromise Argue that Adapting to Crypto Innovation is necessary, even if parts of the Banking Industry Resist the Change.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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