Two of the crypto industry’s leading advocacy groups are pushing back against the U.S. banking sector’s attempt to amend the recently enacted GENIUS Act, a new federal framework for stablecoins.
In a letter sent Tuesday night to Senate Banking Committee leadership, the Blockchain Association (BA) and the Crypto Council for Innovation (CCI) rejected claims from the American Bankers Association (ABA) and more than 50 other banking organizations that the law requires fixes.
“Altering the provisions already enshrined in the GENIUS Act would be unwise and would fundamentally weaken a legislative framework designed to encourage competition and democratize the benefits of technological advancement in digital finance,” the groups wrote.
They argued that revisiting the language of the law could create “unintended consequences” and undermine what has already been signed into law.
Banks Cite Interest and Liquidity Concerns
The ABA, joined by 52 state and national banking associations, raised objections last week to the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as GENIUS. The law was signed by President Donald Trump last month and sets rules for the issuance and oversight of U.S. stablecoins.
Banking groups voiced concerns about several provisions, particularly those around interest payments on stablecoins. While the law restricts stablecoin issuers from paying interest, the ABA argued that the language is weak and can be circumvented by affiliates such as exchanges or brokers. This, they warned, could encourage stablecoins to function as interest-bearing assets, potentially distorting payment markets and creating credit and liquidity risks.
The Bank Policy Institute and other financial groups echoed the concern, suggesting the interest issue could destabilize markets and overlap with the role of bank deposits.
Crypto Advocates Say Changes Favor Banks
In their response, the Blockchain Association and CCI argued that tightening these rules would unfairly advantage traditional financial institutions at the expense of consumers and innovators.
“This is especially important for underbanked consumers who increasingly rely on digital wallets for payments and as a store of value,” the letter said.
Restricting stablecoin functionality while allowing banks to offer similar features, they argued, would tilt the playing field toward legacy financial institutions “that routinely fail to deliver competitive returns and deprive consumers of meaningful choice.”
Yany Aibangbee
The Road Ahead
The debate reflects the growing tension between traditional banks and the crypto industry as stablecoins gain traction in mainstream finance. While banks warn of systemic risks, crypto advocates insist that overly restrictive changes could stifle innovation and limit financial inclusion.
