Banks Sound Alarm: $6.6 Trillion Exodus to Stablecoins Looms as GENIUS Act Sparks Firestorm

Wall Street's old guard is sweating bullets as stablecoins threaten to siphon off a staggering $6.6 trillion in assets—and Washington's gridlock over the GENIUS Act isn't helping.

The great migration begins

Traditional banks now face their worst nightmare: customers voting with their wallets. While regulators debate custody rules and reserve requirements, yield-hungry investors are already pivoting to dollar-pegged crypto at scale.

Washington's paralysis problem

The proposed GENIUS Act could bring clarity—or more chaos—to stablecoin oversight. But with congressional hearings devolving into partisan theater, the real legislation might arrive after the horse has bolted. (And let's be honest—when has Congress ever moved at crypto speed?)

Bankers' last stand?

Expect desperate lobbying blitzes as institutions try to slow the bleeding. Too bad their 'innovative digital asset solutions' still can't beat 24/7 settlement or 5% APY. Some dinosaurs won't evolve.

Crypto stakeholders react

Industry figures quickly pushed back against the banks’ warning, calling it an attempt to stifle competition.

Coinbase Chief Legal Officer Paul Grewal described the concerns as overstated, noting that the US Congress has already considered and rejected similar proposals.

He said:

“This was no loophole and you know it. 376 Democrats and Republicans in the House and Senate rejected your unrestrained effort to avoid competition. So did one President.”

Coinbase CEO Brian Armstrong echoed similar views, while suggesting that the banks are motivated more by profit protection than systemic risk.

Similarly, Jake Chervinsky, CLO at Variant Fund, pointed out that the banks’ regulatory influence fell short, and the resulting concern is largely self-serving.

Meanwhile, Mikko Ohtama, co-founder of Trading Protocol, noted that banks are resisting stablecoins because they threaten the traditional deposit models.

According to him:

“The banks need to give more competitive offers for savings accounts and such. This kind of competition WOULD be better for the customers of the banks. It’s a simple process: people won’t move money out of banks if the banks give them a good deal.”