U.S. banking groups, alongside consumer advocates, are urging revisions to the GENIUS Act, focusing on stablecoin regulations. A letter from these groups requests the removal of a provision that could give state-chartered, uninsured depository institutions a competitive edge. They argue this provision could lead to regulatory arbitrage. Additionally, bankers are concerned about a loophole allowing stablecoin affiliates to offer interest, potentially draining deposits from traditional banks. The GENIUS Act, initially praised for regulating the U.S. stablecoin market, faces scrutiny from these unexpected coalitions as they advocate for protections against competitive disadvantages for banks and the stability of the financial system. They are pressing U.S. senators to eliminate sections of the law while also calling for future legislation to comprehensively address the evolving crypto market structure.

Source đź”—