Galaxy Digital CEO Mike Novogratz recently pointed out that the biggest stumbling block in the US stablecoin regulation is the issue of yield mechanisms, which is highly likely to cause the entire bill to fail.

Where is the core of the problem? It all comes down to a seemingly simple question: should stablecoins pay interest to holders? This has become the most intense point of confrontation between traditional finance and the crypto industry.

On one hand, crypto companies represented by a leading compliant platform firmly oppose being subjected to overly strict regulatory requirements. This company's stablecoin yield business accounts for 18-20% of its total revenue (estimated for the full year 2025), and this income source is crucial for them. Their stance is: under a clear regulatory framework, transparently providing yield mechanisms to users should be legal.

On the other hand, traditional banking industry players are doing everything they can to prevent this. Why? Because the reality is harsh — depositors get almost no interest (close to zero) from banks, but banks can earn around 3.5-4% by depositing these funds at the Federal Reserve. If stablecoins are allowed to pay interest to holders, who would keep their money in banks? Trillions of dollars in deposits could flow into the crypto market, posing a huge threat to the profitability of traditional banks.

In simple terms, this is a zero-sum game over who controls the funds and who earns the interest. Crypto companies want digital dollars to have interest-earning capabilities like bank products, while traditional financial institutions are fiercely defending their profit margins. The bill is stuck, and ultimately, the likely losers are ordinary consumers.