Bitwise stablecoin yield reaches 5%, causes Washington showdown as Banks warn of $6.6T deposit flight

Bitwise stablecoin yield has ignited a fierce policy fight in Washington, thrusting the crypto industry into direct conflict with Wall Street banks.

The product, offering yields up to 5% compared to near-zero returns on traditional accounts, is being hailed as a disruptive alternative to savings and lending systems—one that U.S. regulators and big banks are scrambling to contain.

Bitwise stablecoin yield sparks clash with JPMorgan

Bitwise CIO Matt Hougan minced no words in his criticism of America’s largest bank.

“I think JPMorgan Chase is confused. Can someone tell them that the 0% interest rule is only for stablecoins, not bank accounts?”

Hougan wrote, directly calling out the hypocrisy of banks warning about stablecoin risks while offering negligible returns themselves.

Hougan’s remarks highlight how Bitwise Stablecoin Yield exposes traditional banks’ outdated offerings.

JPMorgan’s top Certificate of Deposit (CD) rates, for example, often require deposits of $100,000 or more, leaving average consumers locked out.

By contrast, stablecoins under the recently passed GENIUS Act allow competitive yields accessible to all.

Wall street pushes back on Bitwise stablecoin yield

Not everyone is celebrating. Major banking lobbies including the American Bankers Association, the Bank Policy Institute, and the Consumer Bankers Association are pressuring Congress to tighten rules on stablecoin yields.

They argue that if platforms like Coinbase or Binance continue offering returns on stablecoins, banks could face an unprecedented $6.6 trillion exodus of deposits.

Such a shift, they warn, would increase borrowing costs, shrink lending capacity, and disrupt small business financing.

Christopher Williston, CEO of the Independent Bankers Association of Texas, summed up the anxiety:

“It feels like there’s a move to replace us.”

Crypto advocates dismiss Wall Street’s warnings as self-serving. Ryan Sean Adams, host of the popular Bankless podcast, accused banks of rent-seeking:

“The banks are trying to stop American citizens from getting yield on their savings. They want to keep it for themselves… Stablecoin yield belongs to the people, not the banks.”

Coinbase CLO Paul Grewal echoed the sentiment, insisting that banks’ opposition is less about stability and more about blocking competition:

“What we’re really seeing is a fight to preserve outdated business models. Stablecoin yields are innovation. Americans deserve access to them.”

Bitwise stablecoin yield and the genius act

The GENIUS Act, passed earlier this year, marked the first federal framework for stablecoins.

While it banned issuers like Circle (USDC) and Tether (USDT) from directly paying interest, it left room for exchanges and asset managers to design yield-bearing products.

This legal opening allowed Bitwise to roll out its Bitwise Stablecoin Yield offering, sparking a scramble in Washington as banks realized the competitive threat. The Act effectively legitimized stablecoin yields while exposing how far behind traditional banking has fallen.

At its core, the Bitwise Stablecoin Yield debate is about financial choice. Consumers can either keep money in banks with near-zero returns or opt for stablecoins with competitive yields.

For the average household, that difference is dramatic. A $10,000 deposit at a major U.S. bank could earn just $1 a year, while the same amount in a stablecoin yield account could generate $500 annually.

This democratization of yield is why banks are fighting back—and why crypto advocates say the fight is about consumer rights, not systemic risk.

Washington’s looming decisions showdown over Bitwise

The showdown over Bitwise Stablecoin Yield is shaping into a defining moment for U.S. financial regulation.

Will Congress side with banks trying to preserve control over deposits, or with crypto innovators pushing to expand access to higher-yielding products?

For now, Bitwise has positioned itself as the industry’s outspoken champion. Hougan’s sharp rebuke of JPMorgan has amplified the debate, ensuring stablecoin yields remain front and center in Washington’s financial policy discussions.

The battle over Bitwise Stablecoin Yield is more than a fight between Wall Street and crypto—it’s a clash over the future of money in America.

With billions, perhaps trillions, at stake, the outcome could redefine how Americans save, invest, and earn in the digital era.