Crypto defenders oppose the efforts of bankers to modify the genius law

By Hannah Pérez

US bankers fear that Stablcoins’s law will offer unfair advantages to Stablecoins entities against banks with federal insurance, destabilizing credit flow and bank deposits.

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Two pro-writing groups sent a letter to the US Senate.
They oppose the call of US bankers to modify Genius Act.
The bankers believe that the law could offer unfair advantages over banks with federal insurance.
They also fear that Genius causes a destabilization of credit flow and bank deposits.

The cryptocurrency industry in the United States has launched an offensive against the efforts of bankers to modify the newly approved Genius law, which establishes a regulatory framework for Stablecoins.

The Blockchain Association and the Cryptographic Council for Innovation, two important cryptocurrency defense groups, sent a letter to legislators opposing the statement of the American banker association (ABA) and other banking groups on the need to implement changes to the language of the legislation of the legislation of Stablecoins.

According to cryptocurrency defenders, banks’ proposals seek to favor traditional financial institutions, limiting competition and options for consumers, especially non -banking.

Pro-written groups oppose a modification

Genius law, signed by President Donald Trump last July, allows the Stablecoins –A type of digital token designed to maintain stable value when linked to fiduciary coins such as the US dollar– They operate under a regulatory framework that facilitates its issuance by unapedible institutions at the state level.

Among its provisions, the law authorizes its non -bank institutions to make money transmissions at the national level without the need for individual state licenses. This provision, contained in Section 16 (D), has generated criticism from the banks, who argue that it creates a “Regulatory arbitration”By giving advantages to these entities against banks with federal insurance.

In a letter issued to the Senate Banking Committee, Crypto defenders rejected ABA’s proposal and other banking groups for Eliminate section 16 (d) and prohibit performance programs offered by members of emitters of Stablecoins. They argued that these modifications would consolidate the domain of traditional banks, restricting innovation and opportunities for consumers, particularly for those who do not have adequate access to banking services.

The Posture of Banks on Genius

Banking groups argue that the genius law presents a lagoon by allowing affiliates of emitters of Stablecoins They offer interest or yields, although the law prohibits direct emitters from doing so.

In a letter sent last week to key senators, banks said they fear that this can divert up to USD $ 6.6 billion in deposits of the banking system, affecting the capacity of banks to grant loans. In addition, they argued that allowing unproven institutions to operate at the national level without specific state licenses Upon existing regulations.

On the other hand, the defenders of the cryptocurrencies, backed by a study of Charles River Associates July 2025, refute these concerns, stating that there is no significant evidence that Stablecoins are causing a massive departure from community banks. In addition, they emphasize that the reservations of Stablecoins, –that are usually maintained in commercial banks and treasure values–They continue to support the financial system by facilitating credit.

Exaggerated figure and discontent consumers?

Pro-writing groups underline that Stablecoins They offer a competitive alternative, especially for non -banking consumers, which often face insignificant interest rates in traditional check accounts (0.07% APY on average, compared to a reference rate of 4.25% – 4.50% of the Federal Reserve Bank).

“Eliminate these characteristics for Stablecoins users, while allowing them in the banking sector, would incline the balance in favor of traditional institutions”they said in their letter, highlighting that this would limit the options for consumers.

Faryar Shirzad, Director of Policies of Coinbasecriticized the position of banks in social network X, noting that their Projected losses figures could be exaggerated. “If customers really moved 6 billion dollars from banks to Stablecoins, what does that say about the value that consumers feel they get from their banks? ”He said, suggesting consumer dissatisfaction with traditional financial institutions.

The Banking Lobby’s Claim That Stablecoins Will Cost Them $ 6 Trillion In Deposits Is Mind Blowing – And Not In A Good Way. Here’s The Truth: While We’re Excited About Stablecoins, Credible Nobody Is Predicting at $ 6t Market. Let’s unpack why This Number is pure fiction. pic.twitter.com/6a1gdstj6t

– Faryar Shirzad 🛡️ (@Faryarshirzad) August 14, 2025

Clarity Law and the future of regulation

Although Genius Act was already signed as law, the possible approval of Clarity Acta broader separate bill on cryptocurrency markets that has already passed through the House of Representatives and is currently in the Senate, could open the door to additional reviews of the provisions on Stablecoins.

Republican senator Tim Scott, president of the Senate Banking Committee, said optimism about the end of the Clarity Project by the end of September, although he recognized possible resistances of figures such as Senator Elizabeth Warren.

While banks seek to take advantage of this legislative process to adjust the genius law in their favor, the crypto industry is determined to defend the current framework, arguing that it protects innovation and promotes a more inclusive financial system.

Article written with the help of AI, edited by Diariobitcoin

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