US Banks Challenge GENIUS Act Over USDC Yield Restrictions

USDC News - Major U.S. banking institutions are advocating for amendments to the recently enacted GENIUS Stablecoin Act, asserting that its current structure creates unfair competitive conditions. The legislation, established in July as the nation's first formal stablecoin law, seeks to regulate the expanding market while preserving U.S. leadership. Banks argue that provisions preventing them from offering interest on their stablecoins—while crypto exchanges continue providing rewards for third-party tokens like USDC and Tether—could disadvantage traditional financial entities. Crypto industry proponents maintain these measures are crucial for driving innovation and protecting consumer options. The dispute underscores increasing friction between conventional finance and digital asset supporters as regulatory frameworks develop. Financial Times reported on August 25 that lobbying activities are escalating, with banks demanding equal treatment regarding stablecoin yields across different sectors.