Schiff Claims Banking Lobby Crushed Crypto

Vocal Bitcoin skeptic and gold advocate Peter Schiff took to X (formerly Twitter) to weigh in on the Senate’s latest stablecoin provisions, arguing that the traditional banking sector has successfully strong-armed lawmakers.

“The banking lobby is still stronger than the crypto lobby,” Schiff stated. He noted that under the current legislative language, stablecoin issuers will not be permitted to pay interest to their users. 

Schiff acknowledged that this allows issuers to keep the yield for themselves; he argued that “sharing it would have meant a lot more customers.”

Ultimately, Schiff used the regulatory hurdle as “just another reason to hold tokenized gold instead.”

Coinbase rejects the latest Senate compromise 

Schiff’s comments come on the heels of reports that Coinbase has informed Senate offices that it cannot support the newest legislative compromise on stablecoin yields.

The newly drafted “stable yield language” was designed to appease traditional banks, which have vehemently opposed the legislation due to deposit flight fears.

Coinbase is a primary funder of the Fairshake super PAC network, which wields massive influence in Washington. 

Circle stock takes a hit

Circle ($CRCL), the issuer behind the USDC stablecoin, saw its stock plunge roughly 15% following news of the deal.

The legislation will only allow for “activity-based rewards,” thus banning traditional yield on stablecoin balances. 

This restriction weakens a key pillar of the bull case by making USDC harder to evolve into a real store-of-value product. 

“Uninformed FUD”

The administration is projecting confidence that a workable deal is still alive despite the pessimistic outlook. 

Patrick Witt, executive director of the president’s Council of Advisors for Digital Assets and a central figure in the ongoing White House negotiations, took to social media to counter the growing panic.

“Plenty of uninformed FUD [Fear, Uncertainty, and Doubt] circulating on social media this week. It’s all going to work out. Bullish,” he said.