Wall Street and Consumer Advocates Unite to Challenge GENIUS Act Provisions on Stablecoins

Wall Street bankers and consumer advocacy groups have formed an unlikely alliance to push for revisions to the GENIUS Act, a U.S. stablecoin law initially celebrated by the crypto industry. The American Bankers Association, alongside groups like Americans for Financial Reform and the National Consumer Law Center, is targeting provisions they argue could undermine state licensing and oversight frameworks.

At issue is a clause allowing state-chartered uninsured depository institutions to operate money-transmission and custody services nationwide without adhering to existing state regulations. Critics warn this creates regulatory arbitrage, granting privileges to uninsured entities while bypassing safeguards applied to traditional banks. A joint letter to U.S. senators demands the removal of this section entirely.