Coinbase Fights Back: Defends Genius Stablecoin Act Against U.S. Bank Opposition

Coinbase draws line in sand against banking giants—champions stablecoin legislation as financial evolution, not threat.

Wall Street Pushback Meets Crypto Resolve

Traditional banks rally against the Genius Stablecoin Act, fearing disruption to their lucrative payment pipelines. Coinbase counters—calling their opposition predictable protectionism dressed as concern.

Stablecoins: The Bridge Banks Don't Want Built

Legislation promises dollar-pegged digital assets with full transparency and federal oversight. Banks argue risk—crypto advocates see faster, cheaper global settlements cutting out middlemen.

Coinbase's full-court press includes lobbying, legal teams, and public campaigns framing banks as innovation blockers. Their message? Let tech modernize finance—not protect legacy profit centers.

Because nothing terrifies traditional finance more than efficiency cutting their fee revenue.

Why US Banking groups are pushing back against the GENIUS Act

Banking institutions in the United States are urging Congress to tighten the GENIUS Stablecoin Act, arguing that a key “rewards loophole” gives crypto platforms an unfair advantage. The law prohibits stablecoin issuers from paying interest or yield, but banks argue that it does not clearly stop exchanges and other intermediaries from offering reward programs tied to stablecoin holdings.

The groups warn that this gap could allow crypto platforms to lure customers with yield-like incentives, divert deposits from traditional banks, and ultimately disrupt credit markets.

Associations including the American Bankers Association, Bank Policy Institute, and Consumer Bankers Association have asked lawmakers to amend the Act to close the loophole. Their proposals seek to extend the prohibition on paying “interest, yield, or rewards” to any entity offering stablecoin-related services, not just the issuers themselves.

Bank lobbyists maintain that without these changes, stablecoin platforms will continue to lure deposits away from traditional institutions while operating outside the capital and liquidity requirements that banks must meet, creating what they call an uneven competitive landscape.

Coinbase’s position echoes that of other industry groups, which maintain that the so-called loophole is not a flaw but a necessary feature to support competition and innovation. They argue that restricting exchanges from offering rewards WOULD unfairly shield banks while limiting consumer choice in the stablecoin market.