Stablecoin Yield Prohibition Gives Digital Yuan Leg Up Over USD: Scaramucci

The expanded prohibition on stablecoin yield in the CLARITY Act makes the US dollar less competitive than the Digital Yuan, Scaramucci said.

The prohibition on yield-bearing stablecoins in the CLARITY Act puts the US dollar at a competitive disadvantage to China’s Digital Yuan, a yield-bearing central bank digital currency, according to Anthony Scaramucci, founder of asset manager SkyBridge Capital.

“The whole system is broken,” Scaramucci in response to the prohibition on crypto exchanges and service providers offering customers yield on stablecoins in , a crypto market structure framework for the US. He asked:

“The Banks do not want the competition from the stablecoin issuers, so they’re blocking the yield. In the meantime, the Chinese are issuing yield, so what do you think the emerging countries will choose as a rail system, the one with or without yield?”

Banks, Bank of America, US Government, United States, Stablecoin — *The CLARITY Act. Source:*

The People’s Bank of China, the country’s central bank, began allowing commercial banks to in January.

Brian Armstrong, the CEO of crypto exchange Coinbase, warned that prohibiting yield on US stablecoins undermines the dollar by making it in foreign exchange markets.

“I worry we are missing the forest through the trees in the US. Rewards on stablecoins will not change lending one bit, but it does have a big impact on whether US stablecoins are competitive,” Armstrong .

The ban on yield-bearing stablecoins is a core pain point by Armstrong and other crypto industry executives, who say the ban on stablecoin yield was introduced to to protect the incumbent banking industry.

Related:

The CLARITY Act expanded the scope of the prohibition on yield-bearing stablecoins introduced in The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, a .

During an earnings call on Wednesday, Bank of America CEO Brian Moynihan said that stablecoins could lead to .

The flight of customer deposits held in traditional banks could reduce the banking industry’s lending capacity, Moynihan said.

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