Sen. Cynthia Lummis urges US banks to embrace stablecoins and digital assets amid crypto bill delays

U.S. Senator Cynthia Lummis called on banks to embrace stablecoins and digital assets, as it opens up more opportunities for existing financial institutions.

"One of the things I don't understand about the banks' resistance is, this gives them an entirely new financial product that they can offer to their customers," Lummis said in a Thursday interview with Fox Business, mentioning digital asset custody and stablecoins as a payment mechanism.

"It provides new opportunities for consumers, it would open up banks to more opportunities — I'd like to see the banks embrace this, rather than resist it," Lummis said. 

Lummis, who chairs the Subcommittee on Digital Assets, emphasized that stablecoins could meaningfully scale domestic and international transactions by slashing settlement times and costs.

Crypto market structure bill

Stablecoins have emerged as one of the most contentious issues in negotiations over potential U.S. crypto market structure legislation. Banking groups took issue with allowing digital asset platforms to pay yield on users' stablecoin holdings, as it could pull deposits away from traditional institutions, particularly community banks. 

The latest U.S. Senate Banking Committee draft includes provisions that effectively ban crypto platforms from offering interest on idle stablecoin deposits, a position backed by banking groups.

Consequently, major industry players — most notably Coinbase — withdrew their support over the yield provisions, triggering an extended delay for the legislation that aims to establish a definitive regulatory framework for bitcoin and the broader digital asset space.

Senate Agriculture Committee Chair John Boozman called stablecoin rewards "a significant contention" with "legitimate" concerns on both sides. Even if they can find common ground on the stablecoin yield issue, both the banking and agriculture committee need to reconcile their drafts into a unified bill that can survive a full floor vote.

Meanwhile, the U.S. dollar stablecoin sector continues to grow significantly, with its total market capitalization reaching $290 billion. Treasury Secretary Bessent previously made a prediction that the U.S. stablecoin market could surpass $2 trillion by 2028, with legislative support.