Eco CEO Ryne Saxe is raising a red flag over the Senate’s new stablecoin proposal — and the implications go well beyond yield.
Saxe argues that the bill’s ban on passive stablecoin interest effectively hands banks a structural advantage while limiting what U.S. fintechs and DeFi apps can offer. And instead of improving consumer protection, he warns it could push everyday users toward offshore platforms and fully on-chain DeFi, where U.S. rules have little reach.
One of his biggest concerns:
Crypto frontends — apps, wallets, and interfaces — may become the new regulatory chokepoint.
Saxe says builders have long anticipated that regulators would shift focus from protocols to interfaces, but the bill formalizes it. That means any company controlling a user interface will face heavier compliance expectations, even as the underlying protocols remain decentralized and globally accessible.
He also points out that the yield ban gives traditional banks a clear competitive edge. While banks keep their deposit base, innovative retail fintech models lose one of their core value propositions — a dynamic he describes as “an artificial limitation” on what stablecoins are allowed to do.
At the same time, global liquidity won’t slow down. DeFi protocols operate regardless of borders, and Saxe notes that trying to suppress programmatic yield in one jurisdiction simply isn’t practical.
Still, he says the U.S. won’t lose its leadership overnight thanks to strong network effects — but warns that jurisdictions like Singapore, Hong Kong, and the EU now offer clearer, more innovation-friendly stablecoin rules.
And the bill’s narrow exception for “activity-based rewards”?
Saxe believes issuers will quickly build systems that effectively replicate yield, making the carve-out “rather easy” to game.
As the debate intensifies, Saxe’s message is clear:
Regulation that limits domestic innovation doesn’t protect consumers — it just pushes them elsewhere.