Crypto Industry Revolts: Over 125 Groups Unite Against GENIUS Act’s Stablecoin Reward Crackdown
Crypto's united front just got real—and regulators are facing their biggest pushback yet.
### The Regulatory Showdown Nobody Saw Coming
Forget quiet lobbying. Over 125 crypto organizations—from DeFi protocols to major exchanges—are publicly slamming proposed expansions to the GENIUS Act. Their target? New rules that would strangle stablecoin reward programs, which they argue are the lifeblood of everyday user adoption.
### Why Stablecoin Rewards Matter
These programs aren't just marketing gimmicks. They're the on-ramp for millions—offering predictable yields in a volatile market. The proposed legislation treats them like unregistered securities, a move the coalition calls a fundamental misunderstanding of how stablecoins actually work. It's a classic case of regulators using a sledgehammer where a scalpel would do, potentially stifling innovation to protect a system that's already failing the average person.
### The Finance Sector's Cynical Win
Here's the quiet part said aloud: traditional banks hate competition. Killing stablecoin rewards removes a key advantage crypto has over measly 0.01% savings accounts—finally letting legacy finance sleep soundly, knowing their outdated products won't have to compete on merit. A win for bureaucracy, a loss for anyone who wants their money to actually work for them.
The coalition's message is clear: adapt the rules for the technology, don't break the technology to fit old rules. The next move belongs to Washington.
Consumer Impact of Low-Yield Accounts
The group also mentioned the implications of this for people. Currently, the federal funds rate is at 3.50%-3.75%. The rates for checking and savings accounts are at 0.07% and 0.40%, respectively.
The reward programs offered by stablecoins appear to be very attractive to families wishing to preserve their purchasing power as prices increase.
Research analyses, coupled with a report filed by Charles River Associates, examined stablecoin adoption between 2019 and 2025, and there was nothing to suggest that stablecoin schemes drained deposits from community banks.
The report also highlighted that U.S. banks park $2.9 trillion in reserves with the Federal Reserve, indicating that stablecoins do not create any liquidity concerns.
The opponents of stablecoin rewards are, in fact, protecting traditional banking revenue streams, as shown in the letter.
Potential Impact of Expanding Crypto Restrictions
The industry associations argue that this will disrupt the balance that Congress has carefully crafted in the GENIUS Act.
The act prohibits the payment of interest by stablecoin issuers to their users, although it allows other legal platforms to offer similar benefits.
Extending the prohibition at this time may lead to instabilities in the marketplace, reduced competition in payment services, and adversely affect new digital payment technologies.
Stablecoins are quicker at settling, cheaper to transfer, and more transparent compared to the old ways.
The reward programs are essential in encouraging the usage, maintaining a level of fair competition, and ensuring bipartisan support for the passage of market structure legislation.
