Overview
- The American Bankers Association’s Community Bankers Council asked senators to extend the GENIUS Act’s interest ban to issuers’ affiliates and partners, targeting exchange reward programs on platforms like Coinbase and Kraken.
- Bank groups, including the Banking Policy Institute, have warned that yield-like incentives could siphon deposits from community banks, citing estimates of up to $6.6 trillion at risk and potential harm to local lending.
- Crypto industry coalitions and executives counter that curbing rewards would limit payments innovation and consumer choice, with Coinbase’s Faryar Shirzad warning of competitiveness risks as China explores interest on its digital yuan.
- OCC chief Jonathan Gould downplayed the likelihood of a sudden deposit flight and said supervisors could act before any material stress developed.
- The Senate Banking Committee is preparing a markup next week of a broader market‑structure bill where the treatment of stablecoin rewards may be clarified, restricted, or preserved, and industry lobbyists say they are pressing for parity between banks and crypto firms.