Overview
- More than 200 community bank leaders, through the ABA’s Community Bankers Council, asked senators to extend the GENIUS Act’s interest ban to issuers’ affiliates and partners.
- The 2024 law blocks issuers from paying interest, yet exchanges such as Coinbase and Kraken offer stablecoin rewards that bankers describe as an indirect workaround.
- Bank groups cite estimates of up to $6.6 trillion in potential deposit outflows and warn of reduced credit for small businesses, farmers, students, and homebuyers.
- OCC chief Jonathan Gould previously downplayed the risk of rapid deposit flight, saying any material shift would not occur overnight and would draw supervisory action.
- Crypto industry organizations argue the banks’ forecasts are overstated and say restricting rewards would curb consumer choice and innovation as Congress weighs broader market-structure legislation.