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A coalition of more than 125 companies and cryptocurrency advocacy groups has launched a coordinated attack against US banking lobbyists. The group includes leading cryptocurrency companies such as Coinbase, Gemini and Kraken.
The move escalates a high-stakes battle over who has the right to pay interest on stablecoin deposits.
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Why are the banks pushing to change the genial law?
The main point of contention is that the GENIUS Act expressly prohibits… Stablecoin issuers like Tether Pay dividends dividends.
However, there is currently a loophole that allows external platforms, such as cryptocurrency exchanges, to pass this stablecoin income to users.
As a result, traditional banking groups are under pressure close this road with force, Under the pretext that it constitutes regulatory arbitration.
The banking lobby claims that if unregulated fintech platforms are allowed to offer high returns on cash-equivalent tokens, this poses a systemic risk to… Traditional financial structure.
In conferences with Capitol Hill, they warned that maintaining the current rules could lead to a massive flight of capital. They estimated potential deposit flows of up to $6.6 trillion from commercial banks to digital asset platforms.
They argue that such a change would erode the capital base that banks use to secure mortgages and commercial loans. This erosion will force lenders to reduce capacity and raise borrowing costs for American households.
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The Cryptocurrency Alliance responds
in message In a December 18 submission to the US Senate Banking Committee, the Cryptocurrency Coalition urged lawmakers to reject the expansion attempts. Purpose of the recently passed GENIUS Act.
“Reopening this case before the implementation of the GENIUS Act would weaken the certainty that defines the regulatory frameworks passed by Congress and introduce unnecessary risk into the broader market structure efforts. It would suggest that even recently enacted waivers remain subject to almost immediate renegotiation, undermining the predictability that markets, consumers and innovators have been discussing.
The digital currency coalition also dismissed the banks’ concern about stability as a protectionist effort to maintain a monopoly on low-interest deposits.
The signatories argued that banks are only trying to protect their profit margins by preventing consumers from accessing the 4% yields currently available in the Treasury market.
“Stablecoin reward programs allow platforms to share value directly with users, helping households benefit from higher interest rate environments rather than absorbing losses from inflation,” the cryptocurrency companies argued.
He also criticized Tyler Winklevoss, co-founder of Gemini, The banking lobby has maneuvered openly, calling it an attempt to “revisit an established legislative problem”.
