Overview

• Major banking associations, including the American Bankers Association, Bank Policy Institute and Consumer Bankers Association, are lobbying to amend provisions they say let crypto exchanges indirectly offer yield on third‑party stablecoins such as USDC and USDT.
• The GENIUS Act bans issuers from paying interest or other rewards to holders, yet banks argue the absence of an explicit bar on third‑party rewards creates an uneven playing field that could accelerate deposit flight.
• Bank groups cite a U.S. Treasury analysis estimating up to about $6.6 trillion in deposits could move to stablecoins, warning of higher funding costs and reduced credit creation during periods of stress.
• Crypto industry voices, including Coinbase’s chief legal officer Paul Grewal and advocacy groups, reject the “loophole” label and argue the allowance for third‑party rewards supports competition and consumer choice.
• Treasury has opened a public comment window through Oct. 17 on technology and illicit‑finance detection under the law, and the Federal Reserve has ended its Novel Activities Supervision Program, returning oversight to normal supervision.