What exactly are stablecoins? This question is becoming increasingly controversial in Washington.

Recently, after the CEO of a major exchange made strong remarks about the draft of the "Digital Asset Market Clarity Act"(Clarity Act), traditional finance also couldn't sit still. PNC Bank CEO Bill Demchak recently criticized directly during the earnings call, with quite blunt language.

His core point is straightforward: stablecoins must either be payment tools or investment products; don’t try to do both. If they are purely a means of payment and settlement, they should be regulated as basic tools; but if they start offering yield functions, they should be subject to the full set of strict regulations like bank deposits or money market funds. Demchak pointed out that the original design purpose of stablecoins was to improve the efficiency of fund circulation, with the core function being payment and settlement, not generating returns for investors. The problem now is that some crypto companies are trying to offer interest, which directly changes the nature of stablecoins.

Once stablecoins can generate yields, they are functionally no different from bank deposits—so why should they enjoy different regulatory treatment? That’s the question Demchak wants to ask.

The discussion in Congress is also centered around this point. They are trying to clarify some ambiguous terms in the GENIUS Act using the Clarity Act as a tool, especially the definition of "incentives" related to stablecoins—this has long been a focal point of debate. The divide between traditional finance and the crypto industry on this issue is evident from their attitudes.