Overview

• Major U.S. banking associations, including the American Bankers Association, Bank Policy Institute and Consumer Bankers Association, are lobbying lawmakers to tighten the new stablecoin law.
• The GENIUS Act bars issuers from paying yield and lets banks issue stablecoins without interest, but reports say crypto exchanges could still provide rewards on third-party tokens such as USDC or Tether.
• Banks argue the structure favors crypto platforms and could trigger large deposit outflows, citing a Treasury estimate that as much as $6.6 trillion could migrate from bank accounts.
• The Bank Policy Institute warns deposit flight would constrain credit, leading to fewer loans and higher borrowing costs for businesses and households.
• Crypto industry groups and figures, including the Crypto Council for Innovation, the Blockchain Association and Coinbase’s Paul Grewal, reject the ‘loophole’ label and say curbs would harm competition and consumer choice.