The Crypto Council for Innovation (CCI) and Blockchain Association have accused banks of trying to “relitigate” issues within the stablecoin bill that President Trump signed into law last month. They argued in a letter to Senate Banking Committee leaders that they should reject the push by banks to tweak language in the GENIUS Act on rewards payments, state powers, and limits on nonbank stablecoin issuers. The American Bankers Association and its counterparts in the states called on senators last week to extend a provision barring interest payments on stablecoins to cover other digital asset actors. The Bank Policy Institute (BPI) similarly urged lawmakers to close the “interest loophole” last week, arguing that stablecoins cannot act as substitutes for bank deposits, money market funds, or investment products.
The two sides are also warring over GENIUS Act provisions impacting state decisions and restrictions on nonbanks’ abilities to offer stablecoins. The banking industry is arguing to repeal a section of the law that restricts the authority of states to bar uninsured out-of-state institutions from operating across state lines. The crypto industry contends this is a “necessary safeguard to protect stablecoin holders” by allowing them to redeem the digital tokens from holders in other states.
Another point of contention is the GENIUS Act’s existing limits on which nonbank financial institutions can issue stablecoins. Banks argue this is another “loophole” that threatens to upend the separation between banking and commerce, while the crypto groups suggest the law strikes the right balance. The push to amend the GENIUS Act comes as lawmakers gear up to consider broader crypto market structure legislation in the fall.
