The financial institution foyer’s requested modifications to the stablecoin-regulating GENIUS Act may undermine competitors and weaken the US greenback’s world place, crypto executives and business teams have claimed.
Crypto advocacy group the Blockchain Affiliation mentioned on Tuesday {that a} bid to lawmakers by a bunch of group bankers to ban issuers from providing yield to tokenholders via third events was “a last-ditch effort by Large Banks to dam competitors after Congress struck a cautious, bipartisan deal.”
The GENIUS Act bans stablecoin issuers from providing curiosity or yield, however main crypto exchanges are nonetheless rewarding stablecoin holders, and group banks argued that closing the claimed loophole is essential for shielding their lending talents.
“No proof” stablecoin adoption will damage banks
The Blockchain Affiliation mentioned there may be “no proof of stablecoin adoption dismantling conventional monetary establishments.”
The Affiliation mentioned that whereas low-yield financial institution accounts primarily profit “giant incumbents,” stablecoin rewards provide larger profit to the on a regular basis particular person.
“No new proof. No new dangers. Simply incumbent strain to close out competitors,” the Blockchain Affiliation mentioned.
Professional-crypto lawyer John Deaton mentioned on Wednesday that such a big change to the laws could be “a nationwide safety entice,” claiming it will incentivize using China’s interest-bearing digital yuan.
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“The stakes are increased than ever as a result of China formally started paying curiosity on the Digital Yuan (e-CNY) – making it a ‘yield-bearing’ competitor to the USD,” Deaton mentioned.
Alexander Grieve, the federal government affairs vice chairman at Paradigm, warned that undoing the GENIUS Act’s rewards provisions would “squander” progress.
“Now, after false and alarmist financial institution cries, they’re trying to undo a key half: rewards,” Grieve mentioned.
In the meantime, Galaxy Digital CEO Mike Novogratz echoed comparable frustration and the US “could be fools” to reverse the regulation.
“What I say to banks who’re whining like mad 4th graders. Toughen up and compete. That is what innovation seems to be like.”
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