When Banks Step onto the Pitch: What Happens When Stablecoins Become a Yield-Harvesting Business?

Follow the money first: a hundred-billion-dollar “float license” 

To users, a stablecoin is “one dollar equals one dollar.” There is no price volatility, so market attention has long sat on who has the bigger share. Issuer profits, however, come almost entirely from interest on the float: users swap dollars for tokens; the issuer receives cash, parks it in short-dated U.S. Treasuries, and keeps the spread.

How large is that spread? Tether’s first full KPMG audit put a number on it. As of 31 December 2025, Tether held about $141 billion in U.S. Treasuries (the largest component of its reserves). The audit confirmed reserves exceeded liabilities by $6.814 billion. [Source 5] A privately held stablecoin company, living on the float spread, has become one of the world’s top-20 holders of U.S. government debt. [Source 6] Combined Treasury-linked reserves of Tether and Circle stood at about $201.6 billion as of 30 June 2026. [Source 7]

In other words: the right to issue a stablecoin is a license to harvest the Treasury float. Once that is clear, this week’s headlines read in reverse.

This week, three things happened at once 

1. United States: 21 banks form a consortium to issue a stablecoin. On 1 September, Goldman Sachs, Bank of America, Citi, Deutsche Bank and 17 other institutions said they would set up a joint venture in 2026, aiming to issue a U.S. dollar stablecoin in the first half of 2027, with other G7 currencies to follow. When the group first surfaced in October 2025 it had 10 members; it has doubled to 21 in six months. [Source 1]

1. United States: the OCC conditionally approved two national banks with crypto baked into the plan. In the same week, the Office of the Comptroller of the Currency issued preliminary/conditional national bank charter approvals to Revolut (Connecticut) and OpenReserve (Utah). Both wrote crypto and stablecoin services into their business plans. [Source 2] [Source 3]

1. Singapore: MAS proposes 100% reserves and a ban on yield. On 1 September, the Monetary Authority of Singapore published a consultation on amendments to the Payment Services Act (P015-2026): regulated stablecoins would need 100% reserves, would be barred from paying interest or yield to holders, would have to complete redemptions within five business days, and would be limited to single-currency tokens in Singapore dollars or G10 currencies. Consultation closes 16 October. [Source 4]

Stacked together, the three lines change the nature of the stablecoin itself.

The real move is “ban the yield” plus “issue it yourselves” 

The market’s default reading is “banks have finally joined crypto.” That is the wrong frame. The move is two-sided.

On one side, the law is disabling yield as a competitive weapon. 

• The U.S. GENIUS Act (Public Law 119-27, signed 18 July 2025) already states that payment stablecoin issuers may not pay interest to holders (the no-yield ban). It also requires 1:1 reserves, monthly disclosures, and OCC-set minimum capital of about $5 million. The FDIC has been explicit: token holders do not get deposit insurance. [Source 8]

• Singapore goes further. It upgrades a U.S.-style single clause into a full template: 100% reserves + no yield + five-day redemption. [Source 4]

Why is the yield ban the core of the capture? The most lethal growth weapon crypto-native issuers had was returning part of the float spread to users — “hold USDT, earn yield”; money-market products hooked to stablecoins. Once paying interest is banned by statute, that path is welded shut and the crypto-native customer-acquisition engine is dismantled.

On the other side, banks are stepping onto the settlement layer themselves. The 21-bank consortium plus the two OCC charters are not about watching stablecoins circulate off their balance sheets. They are about folding the instrument into their own licenses, reserves, and settlement rails — so the tolls, custody fees, and settlement fees flow back into the banking system.

Singapore’s template: defining what is allowed to be called a “stablecoin” 

In this consultation (P015-2026, still open until 16 October), MAS proposes that only licensed issuers may brand their tokens as “MAS-regulated stablecoins,” and that the label would also be available to foreign issuers. [Source 4]

Regulation is no longer only about “who is supervised.” It is allocating naming rights. The market that follows will have a clean hierarchy: regulated “settlement instruments” (no yield, fully reserved, redeemable) versus unregulated “payment tokens” (pushed outside the official narrative).

If Singapore runs this template successfully, it becomes the reference object for the rest of Asia — and for other jurisdictions globally, including Hong Kong. The Hong Kong Monetary Authority’s stablecoin-issuer regime is built on the same logic as MAS: full reserves, no yield, a focus on payment and settlement use cases.

When Treasury buyers collide with a shrinking stablecoin market 

A Bloomberg report names the deeper contradiction. U.S. Treasury Secretary Bessent has been counting on stablecoins as a new buyer of Treasuries — issuers converting reserves into government debt is incremental demand under the curve. [Source 9]

A counter-force is now visible: “no yield + full reserves” constrains stablecoin supply. The market has already contracted by about 0.9% over the past 90 days, with total market cap around $303 billion — USDT about $183.4 billion, USDC about $74.6 billion. [Source 7]

The tension is elegant. The more successfully stablecoins are captured as compliant settlement tools, the less elastic their growth becomes. The Treasury demand Bessent wants depends on that elasticity. The more complete the capture, the harder it is to count on stablecoin expansion to fill the bid for Treasuries. 

So who actually wins? 

String this week’s three events together and the least intuitive conclusion is this:

The stablecoin fight was never about who issues the most tokens. It is about who sits on the clearing and settlement pipe and collects the fee. 

• Tether and Circle already proved the point: the float spread is real money — large enough to fund a top-20 Treasury book.

• Regulators (GENIUS, MAS) are using the yield ban to peel that spread away from crypto-native issuers.

• Banks (the 21-bank consortium, OCC charters) are using licenses and reserve requirements to pull the stripped-out spread onto their own balance sheets.

So “banks issuing stablecoins” is not banks embracing crypto. It is traditional finance’s most successful capture of the settlement layer: the stablecoin is being redefined as a zero-yield, fully reserved settlement instrument the banking system can absorb — while its financial value — the float, the settlement flow, the tolls — is routed back to the banks.

For crypto-native issuers, this is both structural pressure (the right to the float yield is being stripped) and a form of recognition (the stablecoin as a monetary form has finally been admitted by the mainstream). The parties truly squeezed are the mid-sized issuers with neither a license nor a settlement pipe, whose only growth lever was “rebate the yield to acquire users.”

Sources 

1. Reuters — Goldman Sachs, BofA and others plan to issue dollar stablecoin together in 2027 (1 Sep 2026) reuters.com (consortium first appeared with 10 members in Oct 2025: internationalfinance.com)
2. OCC — Corporate Decision #1390 (preliminary conditional approval for Revolut Bank US, National Association) occ.gov / cd1390.pdf 
3. Cointelegraph — Revolut, OpenReserve Win US Approval for Crypto Banks (4 Sep 2026) cointelegraph.com 
4. Crowdfund Insider — MAS Considers Ban On Interest For Regulated Stablecoins (2 Sep 2026) crowdfundinsider.com (P015-2026 detail / 100% reserves / yield ban / 5-day redemption / SGD+G10: kucoin.com flash)
5. Tether KPMG first full audit — $141B Treasuries, $6.814B surplus (announced 13 Aug 2026) bingx.com (supplement: spotedcrypto.com)
6. Spark.Money — stablecoin reserve mechanics (Tether among the world’s top-20 Treasury holders) spark.money 
7. Stablecoin Beat — total market cap $303.0B / USDT $183.4B / USDC $74.6B (5 Sep 2026) stablecoinbeat.com (Tether + Circle combined Treasury-linked reserves $201.6B: axis-intelligence.com)
8. Federal Register — GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale (18 Aug 2026) federalregister.gov (Public Law 119-27 / signed 18 Jul 2025: congress.gov)
9. Bloomberg — Stablecoin Retreat Tests Bessent’s Hopes for New Treasury Buyers (4 Sep 2026) bloomberg.com 

Disclaimer 

This content is provided for general market information and educational reference only. It does not constitute investment advice, legal opinion, compliance advice, trading advice, solicitation, or a recommendation. Digital asset prices are volatile; past data is not indicative of future performance. Readers should not make trading, product, licensing, or other commercial decisions solely on the basis of this content. For legal, compliance, tax, or investment judgments, consult a qualified professional adviser. Forward-looking statements in this article (including the consortium’s plan to issue a token in H1 2027 and the path of regulatory legislation) are based on publicly available information; actual developments may differ and no future outcome is guaranteed.

More research: https://www.ex.io/insights 

About EX.IO: https://www.ex.io 

Our RWA Market: https://www.ex.io/rwa-market