The crypto industry is challenging Wall Street's attempts to amend the GENIUS Act, which they argue favors traditional banks. In a letter to Senate Banking Committee leaders, the Crypto Council for Innovation and the Blockchain Association urged rejection of proposals from banking groups to remove Section 16(d), which allows subsidiaries of state-chartered institutions to conduct money transmission across state lines supporting stablecoin activities. Critics, including the American Bankers Association, fear this would facilitate regulatory arbitrage and threaten bank deposits. However, crypto advocates dismissed these concerns, citing studies showing no significant link between stablecoin usage and bank deposit outflows, asserting that stablecoin reserves are primarily held in banks, benefiting the financial system. The ongoing legislative processes surrounding the Digital Asset Market Clarity Act might reshape stablecoin policies. Republican Senator Tim Scott indicated progress on the bill, anticipating its completion by September, despite possible opposition from figures like Senator Elizabeth Warren.

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