Beach Reads: Top 10 Most-Read Posts From 2026 so Far

1) Spoofing, Smishing and Deepfakes: To Stop Scams, Consumers Need Stronger Protections

Feb. 24, 2026

Americans' savings are at risk as never before as new, technology-driven fraud and scams are surging across the U.S. Phone scams have become part of everyday life for American consumers, and they're becoming more sophisticated and convincing, boosted by AI deepfakes, voice cloning and location spoofing. Many scams originate from organized transnational crime groups that leverage global communications infrastructure to target Americans at scale. Consumers' phones and their apps are key entry points for scams.

More work needs to be done to prevent fraud. Banks are educating consumers and investing significant resources in fraud prevention and mitigation, but often, once fraud reaches a bank's systems, consumers have already been harmed. Prevention is key, and action from industries and regulatory bodies outside of the banking sector are needed to achieve a durable solution.

The FCC has recognized the urgency of this growing problem and is taking important steps to fight scams.

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2) Fraud and Scam Prevention Playbook

Feb. 4, 2026

The majority of fraud and scams begin on social media, communications and messaging platforms, and are largely facilitated by transnational criminal networks beyond the reach of law enforcement. The Playbook outlines five targeted actions that policymakers and the private sector can take to stop scams at the source.

"When one in five Americans loses money to an online scam or attack, fighting back must be a national imperative," stated Greg Baer, BPI President and CEO. "The Administration has taken vital action through its DOJ strike force targeting overseas fraud and scam centers, but we also need policies to stop the kinds of fraud occurring every day in this country. Banks are playing whack-a-mole on behalf of their customers, but we need to help them by requiring social media platforms and telecommunications companies to do their part."

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3) Reduce Overlaps, Prevent Uncertainty: Basel Comments Roundup

June 18, 2026

In June, BPI filed (or co-signed) three comment letters in response to pending capital proposals from the federal banking agencies.

1. Basel Proposal. BPI led a joint trades letter on the Basel proposal alongside the American Bankers Association, Financial Services Forum, Consumer Bankers Association and U.S. Chamber of Commerce. The trades emphasized that the current proposal improves upon the 2023 version, but important changes are needed to eliminate overlapping charges in the framework and better align capital charges with risk.

2. GSIB Surcharge. BPI joined a separate comment letter led by the Financial Services Forum responding to proposed changes to the GSIB surcharge. The Federal Reserve's methodology (known as "method 2") to assign each Global Systemically Important Bank a risk-based capital surcharge is flawed, failing to account for over a decade of economic growth since its adoption. This results in surcharges that overstate the systemic risk of GSIBs, imposing costs on credit availability; the ability of large banks to provide essential liquidity and loans to the economy depends on efficiently calibrated capital requirements.

3. Standardized Approach. BPI co-led an additional comment letter with the ABA, joined by the U.S. Chamber and CBA on proposed changes to the standardized approach, one of two capital stacks from which large banks can choose.

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4) Yield-Bearing Stablecoins Can Destroy Deposits

May 8, 2026

A BPI blog post explains why yield-bearing stablecoins don't simply redistribute deposits within the banking system - they siphon them out of it, and in doing so, they starve growth-supporting loans of their funding. While some public commentary has suggested that the growth in yield-bearing stablecoins backed by Treasury bills will not reduce the level of bank deposits because the deposits would just move around the system, that conclusion is based on an incomplete analysis. A full accounting of this effect must consider the whole picture: the adjustment of interest rates, the aggregate rebalancing of assets and liabilities. A comprehensive understanding of how yield-bearing stablecoins affect deposits and loans is critical as policymakers determine how stablecoins are regulated and whether they can pay interest or yield.

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5) Closing AML/CFT Gaps in the Clarity Act

June 17, 2026

The Clarity Act leaves significant gaps in illicit finance oversight across the digital asset ecosystem, including for DeFi providers, mixers and unhosted wallets.

• The bill would only apply anti-money laundering obligations to certain digital commodity brokers, dealers and exchanges, leaving other digital asset service providers free to operate outside regulatory boundaries.

The bill therefore creates a lighter-touch AML regime for certain crypto firms performing bank-like functions, which could make them attractive to criminals looking to evade law enforcement or national security scrutiny.

• The bill fails to grant clear authority to the Treasury Department to sanction or regulate mixers, tumblers and other firms that facilitate money laundering.

The Gaps. To close the gaps in the framework, Congress should make the following changes:

1. The Clarity Act should subject all DASPs and DeFi to the Bank Secrecy Act and require AML/CFT and sanctions compliance.
2. The Clarity Act should authorize the Treasury to sanction or, at a minimum, regulate mixers, tumblers and other blockchain applications that illicit actors use to facilitate money laundering.
3. The bill should apply an economic benefit test and eliminate proposed legislative loopholes, clarifying that any entity benefiting from the ongoing operation of a decentralized finance protocol is not treated as a non-controlling developer or provider. Any party that is operating the service and deriving economic benefit from that service should be considered a financial institution, not publishing software for free use.

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6) Time for a Reckoning on AML and Crypto

April 23, 2026

The U.S. financial system exists in two parallel tracks. On one side, banks are investing countless resources to protect the financial system from illicit activity - flagging suspicious transactions, executing stringent due diligence and working closely with law enforcement and national security agencies. On the other side, crypto - the global currency of human traffickers, terrorists, drug cartels and fraud - is flowing freely across wallets and borders, without the same obligations to prevent crime and protect the system. In pending market structure legislation, Congress has an opportunity to close the chasm between these two sides. Lawmakers must take it.

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7) Built on Fault Lines: Four Sources of Instability in Stablecoins

June 11, 2026

The GENIUS Act, a law to create a framework for stablecoins, leaves major cracks in the regulatory foundation unfilled. These gaps need policymakers' attention.

Underappreciated Risk. Policy focus on stablecoins has centered on their effects on deposits, monetary policy and the dollar. But an overlooked risk is how stablecoins' legal and operational structure threatens consumers and financial stability. The emerging U.S. stablecoin framework under the GENIUS Act has four fundamental flaws that warrant a closer look:

1. Operational and illicit finance risks. These can undermine the solvency of stablecoin issuers and confidence in stablecoins more broadly.
2. Redemption mechanics that can make destabilizing runs more likely.
3. Serious uncertainty about the rights of stablecoin holders and other stakeholders that are likely to lead to protracted disputes when issuers fail.
4. A deeply flawed resolution and bankruptcy framework that exacerbates all of the above.

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8) Crypto Hacks and DeFi Runs

April 23, 2026

Some disasters come out of nowhere - others are clear many miles away. As predicted in a previous BPI analysis, DeFi lending platforms are unprepared to compensate crypto lenders' losses when loans are made against collateral that loses value. The results demonstrate an alarming truth about the crypto ecosystem: Unlike banking, in which deposit insurance, liquidity and capital requirements keep customers safe in a failure, there's no fallback when systems break.

What Happened: On April 18, 2026, crypto hackers stole an estimated $290 million from major decentralized finance (DeFi) lending platforms, exposing some lenders to potential losses. The largest DeFi lending platform, Aave, experienced mass withdrawals to the point where some lenders, including stablecoin lenders, were unable to withdraw their funds. The incident not only exposed lenders to significant potential losses-it also highlights the inherent risks of DeFi lending, some of which BPI pointed out last year in a note that flagged Aave in particular.

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9) The Upside-Down World of the Liquidity Coverage Ratio: Some Unpleasant Arithmetic

Feb. 11, 2026

The liquidity coverage ratio requires banks to hold enough liquid assets to withstand a run, but introduces distortions that undermine its intended purpose, a BPI note explains.

Two Proposed Adjustments. The note outlines changes that would promote liquidity and mitigate the LCR's unintended consequences.

• An adjustment to the minimum LCR requirement that would allow banks to use the stored liquidity while still satisfying the LCR.
• Destigmatizing the discount window to eliminate the distortions imposed by the LCR.

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10) Are Central Bank Financial Stability Reports Useful? An AI-Based Analysis

July 30, 2026

Major global central banks publish regular financial stability reports to inform policy and shape bank examination. But do those reports effectively anticipate new emerging financial stability risks? A BPI analysis based on an artificial intelligence review of reports from the Federal Reserve, European Central Bank and Bank of England evaluates their risk projection ability. The results show that the financial stability reports produce zero or negative alpha - that is, they consistently fail to identify subsequent financial stability problems that are not already recognized by the market.

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BPInsights will return from summer break after Labor Day.