- Mike Novogratz says bipartisan support exists, but bank lobbying is the main force blocking crypto market structure legislation.
- Banks fear stablecoins could pull deposits by offering yield, weakening margins tied to low-rate consumer savings.
- The real fight isn’t regulators’ turf but who controls consumer money as stablecoins challenge bank deposit economics.
Washington’s stalled crypto market structure bill is facing resistance. Galaxy Digital CEO Mike Novogratz revealed that banks remain the core obstacle. The debate is on stablecoins, deposit flows and who controls the economics of consumer savings.
Lawmakers Align but Banks Push Back
Mike Novogratz said he spent a day and a half in Washington meeting lawmakers. According to Novogratz, both Democratic and Republican senators want a bill passed. He noted that negotiations remain complex because multiple parties are pushing competing interests.
However, the largest friction point is not partisan disagreement. Instead, Novogratz pointed to pressure from major banks. He explained that banks have raised concerns directly with lawmakers. Their focus remains on stablecoins and how they might affect deposits and credit availability.
Stablecoins and the Deposit Yield Debate
According to Novogratz, banks currently pay savers between one and eleven basis points on deposits. At the same time, banks earn roughly 3.5% to 4% by placing those deposits at the Federal Reserve. This gap represents a key revenue source for large financial institutions.
However, stablecoins introduce competition for those deposits. Novogratz said banks worry that consumers could move funds if stablecoins offer yield or rewards. As a result, deposits could leave traditional accounts. That shift would reduce bank margins or force higher consumer rates.
Lobbying Pressure and Legislative Deadlock
Novogratz stated that banks have mounted a strong lobbying effort in Washington. He described the banking lobby as highly organized and influential. According to him, this pressure explains why the bill remains stalled despite bipartisan interest.
While public debate often highlights the SEC and CFTC authority split, Novogratz framed that as secondary. He said the underlying issue involves control over consumer money. If lawmakers allow stablecoins broader functionality, banks face tougher competition. Otherwise, existing deposit economics remain protected.
