Overview

• American Bankers Association and 52 state trade groups sent a letter to the Senate Banking Committee urging Congress to broaden the GENIUS Act’s ban on stablecoin interest to include exchanges, brokers and affiliated entities.
• The associations called for repeal of Section 16(d), which allows out-of-state-chartered SPDIs to operate without host-state approval, arguing it undermines the dual banking system.
• Bankers warned that interest-like rewards offered by affiliates could divert deposits from traditional banks, shrink loanable capital and tighten credit conditions.
• Coinbase’s Chief Legal Officer Paul Grewal dismissed the banks’ demands as protectionist efforts to curb competition in the digital asset market.
• Federal regulators including the OCC have begun drafting the GENIUS Act’s technical rules and will determine if legislative action is needed.