Crypto lobby defends GENIUS Act as bankers seek tighter yield restrictions
Two leading crypto advocacy groups, the Crypto Council for Innovation (CCI) and the Blockchain Association, have jointly urged the Senate Banking Committee to resist efforts by major U.S. banking groups to revise the recently passed GENIUS Act.
These groups argue that Wall Street is attempting to reintroduce restrictions that were already settled during the act’s extensive negotiation process, reports Cointelegraph.
The Bank Policy Institute and other banking lobbies claim the act contains a “yield loophole”, which may allow stablecoin affiliates to offer returns similar to savings accounts without banking regulations. The crypto groups warn that such changes would unfairly favor traditional banks and suppress competition.
Yield loophole debate and regulatory implications
At the heart of the dispute is the claim that the GENIUS Act doesn’t fully prohibit affiliated entities—like crypto exchanges—from offering yield on stablecoins, even if the issuers themselves are banned from doing so. Bankers argue this creates an unfair advantage and poses a risk of pulling $6.6 trillion from bank deposits, threatening the credit supply.
In contrast, the crypto coalitions assert that payment stablecoins are categorically different from bank deposits and should not be subject to the same regulations. They also oppose repealing Section 16(d), which allows state-chartered entities to operate stablecoin businesses across state lines, warning this would lead to a “fragmented regulatory regime” that undermines innovation and interstate commerce.
Industry data and stablecoin growth momentum
The crypto advocates cited a July 2025 study by Charles River Associates that found no meaningful link between stablecoin growth and traditional bank deposit outflows—countering concerns raised by banking groups. They also pointed to data showing over $800 million in yield payouts from stablecoins like sUSDe by Ethena ($30.71M), BUIDL by Securitize ($8.39M), and Sky Ecosystem’s sUSDe ($6.78M) in the past month.
With a total stablecoin market cap of $288 billion, still only a fraction of the U.S. $22 trillion money supply, crypto proponents argue there’s ample room for coexistence. The battle over stablecoin yields highlights deeper questions about how to regulate financial innovation without stifling competition or consumer choice.
Recently we wrote that the recent signing of the GENIUS Act into law marks a historic moment in the regulation of stablecoins in the United States.
Latest Crypto News
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
