Wall Street and Consumer Advocates Push for Revisions to GENIUS Act on Stablecoins

Wall Street bankers and consumer advocates have formed an unlikely alliance to challenge provisions of the GENIUS Act, a U.S. stablecoin law initially celebrated by the crypto industry and former President Donald Trump. The American Bankers Association, alongside groups like Americans for Financial Reform and the National Consumer Law Center, argue that certain clauses threaten the existing financial system's stability.

At issue is a provision allowing state-chartered uninsured depository institutions to operate money-transmission and custody services nationwide without adhering to state licensing requirements. Critics claim this creates regulatory arbitrage, granting these entities privileges akin to federally insured banks but without equivalent oversight. A joint letter to U.S. senators demands the removal of this section entirely.