Paradigm VP of Government Affairs: Limiting Stablecoin Rewards to Transaction-Triggered Mechanisms Is Economically Unfeasible

Odaily News Paradigm's Vice President of Government Affairs, Alexander Grieve, published a statement pointing out that certain banking lobbying groups are pushing to tighten the existing arrangements for stablecoin reward mechanisms under the GENIUS Act within crypto market structure legislation, attempting to restrict stablecoin rewards solely to "merchant-facing transaction activities." This approach, he argues, is economically unsound.

Grieve stated that comparing stablecoins to credit card products represents a misalignment in regulatory thinking. Stablecoins are essentially "debit-like" instruments; their core source of revenue is not transaction fees but rather the ongoing yield generated by the reserve assets (such as U.S. Treasuries) during the holding period. Their value is tied to the size of the assets, not the frequency of transactions. If rewards are only allowed to be distributed to users in consumption scenarios, it would effectively impose an "implicit holding tax" on stablecoin ownership, allowing intermediaries to retain the yield.

He noted that this move is not only detrimental to individual and corporate users but could also weaken the international competitiveness of the U.S. stablecoin ecosystem, potentially driving capital and business overseas. Grieve emphasized that the economic mechanism for stablecoins should be designed around the characteristic of "value generation through holding." Otherwise, it would undermine the original legislative intent of the GENIUS Act, which was to foster innovation.