TD Cowen Hands Stablecoin Yield Ban Just 10% Odds

Jaret Seiberg, TD Cowen's Washington analyst, told clients and Bitcoin Magazine on Monday that Congress has only a 10% shot at banning stablecoin yield over the next two years. He does see a "narrow path" for it. Banks would be the beneficiaries, and he expects them to make the ask again in the next Congress on the theory that Democratic wins open the door.

The procedural math favors a yield-only bill over anything bigger. Seiberg reckons finding 60 Senate votes on stablecoin yield alone is easier than on the broader crypto market structure package, which died on a 49-50 cloture vote on Sept. 15. He had already called that bill effectively dead for this Congress.

The Senate itself has shifted. Crypto allies retired or lost their races, while skeptics climbed. Elizabeth Warren is likely to take the Banking Committee gavel, and Sherrod Brown won back his Ohio seat even after crypto-backed spending of roughly $64 million failed to sink him, Seiberg wrote before the votes were tallied.

Democrats aren't marching in lockstep. Sen. Angela Alsobrooks, a lead Democrat on crypto policy, has backed rewards for using stablecoins rather than for passively holding them — the distinction that shaped the Tillis-Alsobrooks compromise during Clarity Act talks. Seiberg also sees no route for the Clarity Act itself, since Democrats will demand ethics and investor-protection provisions President Trump would reject, making a unified Democratic front behind a yield-only measure unlikely.

This is leftover business from the GENIUS Act, which Trump signed on July 18, 2025, as Public Law 119-27. The law bars permitted and foreign payment stablecoin issuers from paying "any form of interest or yield" just for holding a stablecoin, but it never explicitly covers exchanges and other intermediaries — the gap banks call a loophole. The American Bankers Association and state bankers groups urged Congress late last year to treat platform rewards as banned interest, and the ABA and Independent Community Bankers of America later pushed the Senate to harden Clarity language against balance- and tenure-based rewards. ICBA has warned yield-bearing stablecoins could drain community bank deposits and squeeze local lending.

Regulators left the door ajar too. The OCC's final GENIUS rules, effective January 2027, punted third-party rewards to case-by-case review after banks had hoped the agency would shut it down. Seiberg's one-in-ten call hinges on whether banks can peel yield away from the broader crypto war in the next Congress, or whether Democratic infighting and the image of Congress blocking returns for retail investors keeps it right where he put it Monday.