Will Yield-Bearing Stablecoins Force Banks Into the Crypto Industry? David Sacks Offers New Insights

Source: CryptoNewsNet Original Title: Will yield-bearing stablecoins force banks into the crypto industry? David Sacks offers new insights Original Link: David Sacks, a White House advisor on cryptocurrency policy, said the divide between traditional banking and digital assets is expected to end as regulatory frameworks take shape.

Sacks stated that cryptocurrencies, stablecoins, and banks will ultimately merge into a single digital asset industry. He said that once comprehensive crypto market structure legislation is passed, banks will enter the crypto space at scale, erasing the boundary between traditional finance and blockchain-based systems.

Yield-Bearing Stablecoins: The Central Debate

A central debate in current U.S. crypto legislation concerns whether stablecoin issuers should be permitted to pay yield to holders. Sacks explained that opposition from banks centers on this issue, though he noted that some form of yield is already embedded in the GENIUS Act, meaning the mechanism will likely exist regardless of resistance.

According to Sacks, if banks fail to reach a compromise, they risk losing ground as yield-bearing stablecoins emerge under existing laws. He stated that a comprehensive market structure law is more important than any single provision.

Banks Will Eventually Embrace Yield

Sacks said banks will initially resist yield-bearing stablecoins, but that position will change once they become active participants in the stablecoin business themselves. Over time, banks are expected to view yield as a competitive advantage within a unified digital asset framework. Once regulatory clarity is established, stablecoins could become a core product for both crypto-native firms and traditional financial institutions.

U.S.-China Competition in Tech

Sacks also addressed U.S.-China competition in artificial intelligence and semiconductor technology. He noted that China is increasingly focused on self-sufficiency, particularly through domestic companies. China is building its own technology ecosystem rather than relying on U.S. chipmakers.

The U.S. strategy has been to allow China access to older-generation chips in order to slow expansion by capturing market share. However, he acknowledged that this approach may become less effective as China continues moving toward technological independence.

Regulatory Environment and Innovation

Sacks drew a contrast between regulatory environments under different administrations, arguing that reduced regulatory pressure allows innovation to move faster across both crypto and AI sectors.

Implications for Crypto Adoption

The comments suggest that U.S. crypto policy is moving toward integration rather than isolation of digital assets from traditional finance. Stablecoins, banks, and blockchain infrastructure are increasingly being treated as components of the same financial system.

If regulatory clarity is achieved and institutional participation expands, crypto adoption could accelerate. The advisor’s statements point to a shift in which crypto may be viewed not as an alternative system but as a foundational layer of modern finance.