The recent passage of the US Genius Act is widely celebrated as a key step forward for the adoption of Stablecoin, but a major provision may hinder the appeal of digital dollars compared to money market funds, which increases questions about whether the bill of the bill has been replaced by the pressure of the banking industry to limit the harvesting stablecoins.
The Genius Act clearly prohibits those who give From offering yield-carrying stablecoins, which effectively prevents both retail and institutional investors from earning interest in their digital dollar handling.
As such, Temujin Louie, CEO of the Crosschain Interoperability Protocol Wanchain, was warned against the law as an unqualified win for the industry.
“In a vacuum, this may be true,” Louie told Cointelegraph. “But with the clear ban on those who provided Stablecoin from the yield offering, the Genius Act really protects a major advantage of funds in the currency market.”
Number Cointelegraph reported. JPMorgan strategist Teresa Ho noted that tokenized MMFs could unlock new cases of use, such as service as margin collateral.
Louie, who claimed that “the tokenization provides for money market funds to adopt the speed and flexibility that has previously been unique to stablecoins, without sacrificing safety and regulatory administration.”
Paul Brody, head of the global blockchain on EY, told the cointelegraph that tokenized MMFs and tokenized deposits “may find a significant new opportunity onchain,” especially in the absence of yields in Stablecoin’s handling.
“Money market funds can work and look like stablecoins to end-users, but there is a difference that they offer yield,” Brody said.
According to Ey’s Brody, the presence of yield can be a decision of factor between tokenized MMFs and stablecoins. However, he noted that Stablecoins maintain some advantages:
“Stablecoins are allowed as the property of the carrier, which means they can easily be placed on the DeFI services and other onchain financial services without complex accessing and transfer of controls. If tokenized money market funds have many restrictions that prevent such use, it is possible that the harvesting can be insufficient to break the added complications”
Related: The Crypto Execs Center stage as Trump signed the Stablecoin Bill in law
The banking industry’s grip on Stablecoin debate
The prohibition of the Genius Act in Ani-Bearing Stablecoins came as a little surprise, including Cointelegraph has previously reported That the banking lobby appears to have given significant influence on the ongoing policy debate around Stablecoins.
Back in May, NYU professor and blockchain consultant Austin Campbell mentioned resources within the banking industry, announcing that financial institutions are actively launching to hinder stablecoins with interest to protect their long -term business model.
After decades offering depositors a little interest, banks are afraid that their competitiveness is dangerous if Stablecoin providers are allowed to offer directly to the holders, Campbell said.
However, digital yield assets exist in the US, even under apparent purview of security regulation. In February, the Securities and Exchange Commission approved the country First Security that produces Stablecoin SecurityIssued by figure markets. The token, called the YLDS, offered a 3.85% yield in the launch.
Related: Genius sets new rules to Stablecoin but remains unclear to foreigners who gave
