The Blockchain Association and the Crypto Council for Innovation pushed back against recent claims by the banking industry that newly passed stablecoin legislation—known as the GENIUS Act—needs changes.
In a letter sent to Senate Banking Committee leadership on Tuesday night, two leading crypto advocacy groups denounced a letter put forward last week by the biggest banking association American Bankers Association (ABA), opposing changes to be made to the recently signed stablecoin law.
"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," they said in the letter. "This proposed change introduces a significant policy shift that could create unintended consequences for the digital asset ecosystem and unnecessarily attempts to reimagine language that has already passed into law in the GENIUS Act."
Last week, ABA, alongside 52 bankers' organizations, proposed fixes to the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS, amid concerns over interest payments, state regulation, and non-financial companies issuing stablecoins. The bill was signed into law by President Donald Trump last month. The associations noted the fixes could be resolved in developing crypto market legislation.
One of the bank groups' main issues was the law's supposedly weak prohibitions against stablecoin issuers paying interest to holders. While the groups are in favor of the restrictions, they argued new law can be easily bypassed by exchanges, brokers, and other affiliates, thereby "distorting market incentives" by turning stablecoins into potential stores-of-value and credit mechanisms rather than simply a means of payment.
Other bank groups, including the Bank Policy Institute, also raised concerns about with interest language in GENIUS, including potential deposit liquidity and credit risks.
But CCI and BA argue that proposed changes would cement the position of traditional financial institutions, leaving consumers with fewer choices.
"This is especially important for underbanked consumers who increasingly rely on digital wallets for payments and as a store of value," they said. "Eliminating these features for stablecoin users, while allowing them in the banking sector, would tilt the playing field in favor of legacy institutions, particularly larger banks, that routinely fail to deliver competitive returns and deprive consumers of meaningful choice."
