The American Bankers Association made regulating payment stablecoins a key priority in its 2026 policy agenda, calling for a complete ban on income-generating products based on such assets to avoid risks to traditional banking models.
The American Bankers Association (ABA), the leading national trade association representing U.S. banks and financial institutions, published a document outlining its main policy priorities for the coming year, highlighting stablecoins as a potential risk to the traditional banking system.
Specifically, the document states that payment stablecoins shouldn’t become a functional equivalent of deposits, as this could reduce local lending, especially among regional and community banks.
The ABA also emphasizes that authorities should fully prohibit any form of yield on payment stablecoins, including interest or other rewards, regardless of the platform used. According to the ABA, maintaining a competitive balance between bank deposits and digital payment instruments is critical to financial system stability and the support of small businesses and households.
The ABA represents the U.S. banking industry, with member institutions managing $25.1 trillion in assets, $19.7 trillion in deposits, and a $13.2 trillion loan portfolio. More than 2 million people work within the institutions represented by the association.
The ABA’s position on stablecoins is part of a broader set of measures in its plan to strengthen the economy, alongside combating financial fraud and updating regulatory requirements. The document notes that banks play a key role in economic growth by channeling liquidity into lending, while uncontrolled growth of digital “deposit substitutes” could weaken this mechanism.
The document was prepared by the ABA Government Relations Council, approved by the association’s board of directors, and will serve as the basis for the ABA’s interactions with the U.S. Congress, the administration, and federal banking regulators in 2026.
Jeremy Allaire, CEO of Circle, commented on U.S. banking sector concerns during a panel at the World Economic Forum in Davos. He noted that in key jurisdictions, interest payments on payment stablecoins are already prohibited, and he considers fears of mass withdrawals from bank deposits exaggerated.
Allaire emphasized that existing regulatory frameworks, including the U.S. GENIUS Act and the EU’s MiCA, treat payment stablecoins as a settlement instrument and explicitly ban interest payments to holders. According to him, stablecoin issuers may earn income from reserves, but user rewards or bonuses typically fall under commercial partnership programs and do not constitute interest directly tied to stablecoin deposits.
He also stated that claims suggesting such payments could undermine banks’ deposit bases and paralyze lending are simply absurd. The Circle CEO reminded that similar concerns were raised by the ABA during the growth of money market funds, which reached around $11 trillion, yet lending continued without negative effects on the economy.
For more on the stablecoin sector’s development in 2025, see the special analytical report by CP Media.
