The central problem in negotiations over stablecoin rewards is not political, it’s linguistic. How do you write a prohibition broad enough to catch the next product innovation that functions like interest without being called interest?
That question dominated discussion at the American Bankers Association’s Washington Summit. Brooke Ybarra, ABA’s SVP for innovation and strategy, who has been attending White House meetings on the topic, described the challenge in precise terms. The crypto sector’s response to concerns about store of value features in payment stablecoins is typically “that’s not what we’re trying to do,” she said, but pinning that down in statutory language is proving difficult.
“What words do we need on the page to ensure that this prohibition is strong enough to prevent the next innovation in marketing or product type that’s going to feel a lot like a workaround,” she said, adding that the goal is to capture “all things that are functionally equivalent, economically equivalent, substantially similar to interest, yield and rewards for holding, retaining and use of a payment stablecoin.” Notably, her formulation included usage alongside holding and retaining, potentially a negotiating lever, or a signal that the prohibition being drafted extends further than exchanges might expect.
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