Catenaa, Thursday, August 21, 2025- Two leading cryptocurrency advocacy groups have rejected a push from the banking industry to amend the recently enacted GENIUS stablecoin law, warning that changes would weaken the framework.
The Blockchain Association and the Crypto Council for Innovation sent a letter Tuesday to Senate Banking Committee leaders, criticizing proposals from the American Bankers Association and more than 50 affiliated organizations.
The banking groups argue the law, signed last month by President Donald Trump, fails to adequately restrict interest payments on stablecoins and could allow exchanges and brokers to bypass the rule.
The GENIUS Act, formally titled the Guiding and Establishing National Innovation for US Stablecoins Act, was written to encourage digital asset competition and expand payment choices.
Bank associations contend the legislation leaves loopholes that could let stablecoins function as savings tools rather than just as payment methods, creating liquidity and credit risks.
Other organizations, including the Bank Policy Institute, voiced similar concerns about the potential for stablecoins to resemble deposits. They urged lawmakers to tighten language to prevent what they view as regulatory arbitrage.
Crypto groups countered that revising the law would tilt the market in favor of traditional institutions, narrowing consumer options and harming underbanked communities that rely on digital wallets.
They argued the bankers’ changes would entrench legacy systems while undermining efforts to broaden financial access.
The dispute highlights a growing divide between established financial groups and crypto advocates as regulators weigh the future of digital dollar systems.
