Crypto industry groups slam bankers’ push to rewrite GENIUS Act

Two of the crypto industry’s leading advocacy bodies are pushing back against Wall Street bankers’ latest attempt to roll back the United States’ newly minted stablecoin law.

In a joint letter to the Senate Banking Committee on Tuesday, the Crypto Council for Innovation (CCI) and the Blockchain Association urged lawmakers to reject recommendations from the American Bankers Association (ABA) and state banking groups.

As reported, several US banking groups, led by the Bank Policy Institute (BPI), have urged Congress to tighten the GENIUS Act by closing what they call a loophole that could allow stablecoin issuers and their affiliates to pay yields indirectly.

In a letter sent last Tuesday, the groups warned that failing to address the gap could drain as much as $6.6 trillion from traditional bank deposits, threatening the flow of credit to households and businesses.

Stablecoin yield loophole

The bankers also argued that while the GENIUS Act bans stablecoin issuers themselves from offering yield, it does not explicitly prevent exchanges or affiliates from doing so on their behalf. They claimed this risks giving stablecoins a competitive edge by attracting users with returns similar to savings accounts, without subjecting them to the same banking rules.

The crypto groups accused the banking lobby of trying to re-litigate issues already settled in months of negotiations, warning that the proposed revisions would tilt the field toward traditional banks while stifling innovation and consumer choice.

“Payment stablecoins are not bank deposits, or money market funds, or investment products, and thus they are not regulated in the same way,” the crypto advocacy groups wrote. “Unlike bank deposits, payment stablecoins are not used to fund loans,” they added.

The letter pointed out Section 16(d) of the law, which allows subsidiaries of state-chartered institutions to conduct stablecoin business across state lines without requiring additional licenses.

Banking groups want the clause repealed, but CCI and the Blockchain Association argued that scrapping it would re-create “the same fragmented, balkanized regulatory regime that stifles interstate commerce.”

They also pushed back against claims that yield-bearing stablecoins could drain deposits from community banks. They cited a July 2025 analysis by Charles River Associates, which found no significant link between stablecoin growth and bank outflows.

Yield stablecoins cross $800 million in payouts

Yield-bearing stablecoins have distributed over $800 million in total returns to holders so far, according to a recent post by StableWatch. Over the past 30 days, Ethena Staked USDe (sUSDe) led payouts with $30.71 million, followed by Securitize’s BUIDL at $8.39 million and Sky Ecosystem’s staked USDe (sUSDe) with $6.78 million.

The total market cap of stablecoins currently sits at $288 billion, a fraction of the US dollar money supply, which the Federal Reserve reported as $22 trillion at the end of June.