PNC Bank CEO Bill Demchak has a blunt message for the stablecoin industry: stop trying to be a Swiss Army knife. On the bank’s fourth-quarter earnings call, Demchak argued that stablecoins paying interest are essentially trying to wear two hats at once—a multitasking luxury traditional finance rarely gets to enjoy.
“The fight right now in D.C. is over some terminology in the GENIUS Act that they’re trying to fix with the Clarity Act, with respect to whether rewards count as interest paid on stablecoins, which was forbidden in the GENIUS Act, as a practical matter,” Demchak said.
He maintained that stablecoins were originally engineered as efficient payment tools, not investment vehicles. “That remains to be seen. But it isn’t marketed, nor is it regulated, as an investment vehicle,” he stated.
Demchak’s core argument is straightforward: if stablecoins want to pay interest, they should go through the same regulatory gauntlet as every other interest-bearing product. “If they actually want to pay interest on it, then they ought to go through the same process,” he said. “Then it looks to me an awful lot like a government money market fund.”
His comments arrive as lawmakers debate how to define and regulate stablecoins, particularly whether issuers should offer yield without following the same rules as banks or money market funds. The Senate Banking Committee’s planned markup of market structure legislation was postponed earlier this week after Coinbase pulled support for the bill, citing provisions that could harm consumers and competition.
Demchak made it clear where banks stand: “So I think banks are sitting here saying, if you want to be a money market fund, go ahead and be a money market fund. If you want to be a payment mechanism, be a payment mechanism. But money market funds shouldn’t be payment mechanisms, and you should pay interest.”
PNC has taken limited steps into blockchain technology. In 2021, the bank partnered with Coinbase to explore blockchain-based payments and digital asset infrastructure for institutional clients, while stopping short of offering retail crypto products.
Demchak also pointed to the crypto industry’s influence in Washington as the debate continues. “The crypto industry has a lot of lobbying power to say, no, we want it all,” he said. “We’ll see how this plays out.”
The debate highlights ongoing tension between banks and crypto firms as regulators weigh how to oversee stablecoins that blur the line between payments and investing.
