Congress Urged to Ban Interest on Payment Stablecoins to Protect Main Street Lending

Financial experts and policymakers are calling on the U.S. Congress to implement a clear ban on interest-bearing payment stablecoins. The core argument is that allowing such features could severely disrupt traditional Main Street lending. If payment stablecoins offer competitive yields, they might draw significant deposits away from community banks and credit unions. This capital drain could reduce the availability of loans for small businesses, mortgages, and personal financing in local economies. The push for legislation aims to define stablecoins strictly as digital payment tools, not as investment or savings vehicles that could destabilize the existing financial ecosystem. This move is seen as critical for maintaining a balance between fintech innovation and the health of conventional banking services vital to everyday Americans.