Two American crypto lobby groups hit back last week at an open letter signed by a group of bankers’ associations, which argued crypto-trading platforms should be barred from paying interest to users who hold stablecoins. Prohibiting such interest payments would be bad for competition, the crypto lobbyists argued. (The Logic)

Talking point: The clash suggests U.S. banks are taking seriously the threat posed by stablecoins, digital assets whose value is typically pegged to the U.S. dollar. A committee of the U.S. Treasury Department predicts stablecoins are about to explode as a mainstream payment mechanism following legislation passed last month that paves the way for banks and other firms to issue them. People might move their money out of bank accounts and into crypto platforms that offer yield on stablecoins, ultimately harming the economy, the banks argued. The crypto lobby groups countered that stablecoin reserves must be held in bank accounts or Treasury assets under the law, keeping the money inside the traditional financial system.