A coalition of cryptocurrency and blockchain industry organizations issued an open letter to Congress on Wednesday, urging legislators to resist bank lobby efforts to amend the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Signatories—including the Crypto Council for Innovation, the Blockchain Association, and the DeFi Education Fund—argued that proposed rewrites from major banking trade groups would dilute critical consumer protections and compliance requirements established under the act.
The banking sector’s amendment proposals seek to relax reserve rules for stablecoin issuers, permit commingling of client and operational funds, and expand exemptions for insured depository institutions. In their letter, industry groups warned that these changes would significantly increase systemic risk, expose retail users to undercapitalized reserve models, and concentrate market power among legacy financial institutions, undermining the original bipartisan intent of the legislation.
Representatives highlighted that the GENIUS Act set rigorous standards for asset segregation, attestation of reserves, and transparent disclosures—measures designed to foster responsible innovation. The letter stressed that stablecoins serve as a critical infrastructure layer for on-chain payment rails, cross-border transactions, and programmable money applications, and must be governed by robust guardrails rather than pro-bank carve-outs. Easing these rules, they contended, would discourage new entrants and reinforce incumbent banks’ dominance.
Lawmakers from both parties have previously praised the GENIUS Act for promoting consumer safety while encouraging digital asset growth. Proponents now fear that heavy bank lobbying will erode the act’s effectiveness and stall stablecoin adoption. The industry letter calls on the House Financial Services and Senate Banking Committees to maintain the original text, arguing that sound legislation demands stablecoin issuers be held to reserve standards comparable to money market funds and trust companies.
In a statement, the Crypto Council for Innovation noted that more than 90 stablecoins currently issue over $280 billion in global market cap, with leading tokens like USDT and USDC providing vital liquidity. The group asserted that stablecoin usage is projected to exceed $2 trillion by 2028 under existing frameworks, driven by on-chain commerce, remittances, and corporate treasury applications. Only with clear, consistent rules, it said, can the United States retain its leadership in digital finance.
The debate over banking amendments coincides with broader crypto policy developments, including the pending market structure bill and stablecoin reserve requirements under SEC and CFTC oversight. Industry observers expect floor votes on the banking proposals later this month, making the fight over GENIUS Act revisions a bellwether for future crypto regulation. For now, trade groups are mobilizing public support and stakeholder outreach to preserve the act’s core protections and ensure a level playing field for crypto innovators.
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