The US banking lobby is opposed to interest-bearing stablecoins, which they perceive as a risk to existing credit systems. The Banking Policy Institute (BPI), led by JPMorgan CEO Jamie Dimon, recently urged Congress to amend the GENIUS Act, which regulates the stablecoin industry, suggesting it may create risks that lead to increased lending costs and fewer loans for businesses. Critics in the crypto industry argue that allowing interest on stablecoins could provide competitive financial products, though concerns regarding compliance and oversight remain. The BPI raised worries about a potential increase in unregulated ‘shadow banks’ due to issuer interest. Despite these arguments, some believe that resistance from the banking lobby may be futile given the growing adoption of stablecoins. Notably, the GENIUS Act already reflects some banking concerns, leaving the prospect of amendments uncertain as the crypto industry garners increasing influence. The implications for consumers and businesses include potential higher interest rates and reduced loan availability if stablecoins continue to gain ground.

Source 🔗