The Blockchain Association and the Crypto Council for Innovation are pushing back against US banking groups seeking to revise the Genius Act on stablecoins.

In a letter to the Senate Banking Committee, the crypto groups opposed proposals from the American Bankers Association and 52 other organizations to amend the law signed by President Donald Trump in July 2025.

Banking groups have raised concerns over the law’s approach to interest payments, state regulation, and the ability of non-financial firms to issue stablecoins, arguing that current rules could be bypassed and may introduce credit and liquidity risks.

The crypto advocates countered that altering the law could reduce competition and limit consumer choice, especially for users of digital wallets.

The debate highlights ongoing tensions between the banking sector and cryptocurrency industry over US stablecoin regulation.

🔗 Source: The Block

🧠 Food for thought

1️⃣ Interest payment restrictions reveal core tension between banking sectors

The dispute over the GENIUS Act’s interest payment rules exposes a fundamental competitive battle between traditional banks and stablecoin providers.

The Act specifically prohibits stablecoin issuers from paying interest to holders, a restriction that banking associations want strengthened while crypto groups oppose any changes 1.

This prohibition differentiates stablecoins from traditional bank deposits, potentially steering consumers toward banks for yield-generating products while positioning stablecoins purely as payment tools.

The crypto advocacy groups argue that eliminating these features “would tilt the playing field in favor of legacy institutions, particularly larger banks, that routinely fail to deliver competitive returns.”

This regulatory design reflects an attempt to prevent stablecoins from directly competing with traditional banking products like savings accounts, illustrating how new financial technology regulations often aim to preserve existing market structures.

2️⃣ Stablecoin market growth amplifies regulatory stakes

The intensity of this lobbying battle makes more sense when considering stablecoins’ rapid market expansion and their growing threat to traditional payment systems.

Stablecoins experienced a 28% increase in usage over the past year and surpassed the combined transaction volumes of major payment networks like Visa and Mastercard in 2024 2.