The reason? The way that the GENIUS Act is worded could allow for customers to earn yield (interest) through a loophole enabling crypto exchanges themselves, and not issuers, to indirectly offer interest and rewards to people holding stablecoins issued by third parties like Circle or Tether.
The banking sector’s argument has been blunt: if stablecoin issuers begin paying interest, Americans could abandon bank deposits in search of better yield. The specter of deposit flight is one that bank lobbyists know resonates with regulators and lawmakers, particularly in a post-Silicon Valley Bank environment where confidence in bank stability remains fragile.
Yet while banks worry about yield, corporate finance officers, treasurers, and payments executives are discovering that the real problem with stablecoins may have little to do with interest rates.
Instead, the messy and fragmented infrastructure underpinning stablecoins, including the proliferation of blockchains, the lack of interoperability between wallets, and the absence of common settlement rails is what is giving finance execs a headache, particularly those eyeing the use of stablecoins for cross-border expansion. Unlike dollars in the bank, stablecoins don’t sit neatly in one place. They’re scattered across competing blockchains, wallets and exchanges, each with their own technical quirks and settlement rules. For treasurers, that can create friction in the very efficiency story stablecoins are supposed to deliver.
This, even more than the banking industry’s yield debate, could determine whether stablecoins mature into a mainstream corporate tool for cross-border payments and working capital, or whether they remain siloed within crypto trading platforms.
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See also: FinTech Partnerships Look to Crack Stablecoin On- and Off-Ramp Challenges
Fragmentation and the Stablecoin Landscape’s Plumbing Problem
Stablecoins began as a niche instrument for traders moving in and out of volatile cryptocurrencies without touching the banking system. By anchoring to the U.S. dollar, they offered a haven of relative stability inside the crypto ecosystem. Over time, however, their utility as digital dollars caught the attention of corporations experimenting with faster settlements, treasury diversification and new payments rails.
Today, the stablecoin landscape is less a unified ecosystem than a patchwork quilt of competing blockchains and wallet standards. USDC, one of the leading stablecoins, exists simultaneously on more than a dozen blockchains, from Ethereum and Solana to Avalanche and Polygon. Each chain has its own consensus mechanisms, fee structures, and technical constraints. Moving tokens across them isn’t trivial, it requires bridging services, custodians, or specialized wallet infrastructure.
For a chief financial officer (CFO), this means that what appears on paper to be “one dollar” of USDC is in practice fragmented across different technical domains. A treasury team that wants to receive stablecoins from a supplier might need to decide whether to settle on Ethereum, where fees can spike unpredictably, or on a cheaper but less battle-tested chain. Once funds arrive, moving them to another chain to meet liquidity needs can be cumbersome and introduce counterparty risk.
Wallet fragmentation compounds the problem. A wallet built for Ethereum may not natively support Solana-based tokens; a custody solution tailored to corporate governance may be slow to add new chain integrations. Executives tasked with safeguarding funds must navigate a thicket of technical incompatibilities and compliance risks, undermining the very efficiency gains that stablecoins promise.
Read more: Are Closed-Loop Financial Instruments the Future of Institutional Stablecoins?
Understanding Corporate Adoption in Practice
Stablecoins expose a paradox of modern finance: the technology is designed for frictionless transfer, yet its current deployment creates new frictions at scale. In traditional banking, dollars are fungible across institutions thanks to clearinghouses, payment networks, and regulatory frameworks that enforce consistency. A dollar at JPMorgan is the same as a dollar at Wells Fargo, and payments between them clear through established rails.
Stablecoins lack that universality. The same “brand” of stablecoin can behave differently depending on the chain it resides on. Without common rails, treasurers must effectively treat each version of the token as a distinct asset. Accounting for these variations, integrating them into ERP systems, and managing liquidity across chains all require layers of middleware that are still immature.
This, in turn, ultimately plays into banks’ lobbying strategy. By focusing the debate on the potential threat to deposits, banks have successfully framed stablecoins as a systemic risk rather than an operational tool. Yet as long as policymakers fixate on yield, the more immediate pain point for corporates, fragmentation, remains unaddressed.
If history is any guide, efficiency will eventually prevail. Just as credit cards, mobile payments and digital banking overcame early fragmentation, stablecoins may ultimately converge around interoperable standards. But until that day, the challenge for CFOs is not yield. It is plumbing, pipes and the invisible architecture of money.
