Two of the crypto trade’s main advocacy our bodies are pushing again in opposition to Wall Street bankers’ newest try and roll again the United States’ newly minted stablecoin legislation.
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 suggestions from the American Bankers Association (ABA) and state banking teams.
As reported, a number of US banking teams, led by the Bank Policy Institute (BPI), have urged Congress to tighten the GENIUS Act by closing what they name a loophole that might enable stablecoin issuers and their associates to pay yields not directly.
In a letter despatched final Tuesday, the teams warned that failing to handle the hole might drain as a lot as $6.6 trillion from conventional financial institution deposits, threatening the circulation of credit score to households and companies.
Related: Coinbase revives stablecoin bootstrap fund to spice up USDC in DeFi
Stablecoin yield loophole
The bankers additionally argued that whereas the GENIUS Act bans stablecoin issuers themselves from providing yield, it doesn’t explicitly forestall exchanges or associates from doing so on their behalf. They claimed this dangers giving stablecoins a aggressive edge by attracting customers with returns just like financial savings accounts, with out subjecting them to the identical banking guidelines.
The crypto teams accused the banking foyer of making an attempt to re-litigate points already settled in months of negotiations, warning that the proposed revisions would tilt the sphere towards conventional banks whereas stifling innovation and shopper alternative.
“Payment stablecoins usually are not financial institution deposits, or cash market funds, or funding merchandise, and thus they don’t seem to be regulated in the identical approach,” the crypto advocacy teams wrote. “Unlike financial institution deposits, fee stablecoins usually are not used to fund loans,” they added.
The letter identified Section 16(d) of the legislation, which permits subsidiaries of state-chartered establishments to conduct stablecoin enterprise throughout state strains with out requiring further licenses.
Banking teams need the clause repealed, however CCI and the Blockchain Association argued that scrapping it will re-create “the identical fragmented, balkanized regulatory regime that stifles interstate commerce.”
They additionally pushed again in opposition to claims that yield-bearing stablecoins might drain deposits from neighborhood banks. They cited a July 2025 evaluation by Charles River Associates, which discovered no vital hyperlink between stablecoin development and financial institution outflows.
Related: South Korea readies stablecoin framework; invoice set for October
Yield stablecoins cross $800 million in payouts
Yield-bearing stablecoins have distributed over $800 million in whole returns to holders to this point, in accordance to a current put up by StableWatch. Over the previous 30 days, Ethena Staked USDe (sUSDe) led payouts with $30.71 million, adopted by Securitize’s BUIDL at $8.39 million and Sky Ecosystem’s staked USDe (sUSDe) with $6.78 million.
The whole market cap of stablecoins presently sits at $288 billion, a fraction of the US greenback cash provide, which the Federal Reserve reported as $22 trillion on the finish of June.
Magazine: Bitcoin vs stablecoins showdown looms as GENIUS Act nears
