Crypto Industry Challenges Bank-Led Push to Amend U.S. Stablecoin Law

The crypto sector is aggressively opposing efforts by traditional banks to reshape the U.S. stablecoin regulatory framework. Industry groups argue that proposed changes to the GENIUS Act would unfairly advantage banks and undermine innovation.

At issue is Section 16(d), which permits state-chartered institutions' subsidiaries to facilitate nationwide stablecoin redemptions without state-by-state licensing. Banking associations claim this creates regulatory arbitrage, while crypto advocates maintain it's essential for seamless cross-border transactions.

The dispute centers on yield programs offered by stablecoin issuer affiliates - a practice banks warn could divert trillions in deposits from traditional institutions. Crypto lobbyists counter that such programs represent legitimate financial innovation that shouldn't be stifled by incumbent interests.