Big Banks Push to Dismantle GENIUS Act as Crypto Group Fights Back

TLDR:

• Blockchain Association warned banks want to roll back GENIUS Act protections, risking consumer access to stablecoin innovation.
• Letter to Congress stresses GENIUS guarantees one-to-one reserves, oversight, and clarity for U.S. crypto companies.
• Banking lobby argues stablecoins threaten deposits, though deposits total $18T versus $277B in stablecoins worldwide.
• Campaign launched to raise awareness and push lawmakers to keep GENIUS Act protections in place.
  

Big banks are pushing back on the GENIUS Act, sparking a fight over the future of stablecoin rules. 

Crypto advocates say rolling it back would hurt innovation and consumer protection. The Blockchain Association has stepped in to defend the law. It sent a letter to Congress this week urging lawmakers to hold the line. 

The clash sets the stage for a tense standoff in Washington.

Banks Target GENIUS Act Over Stablecoin Rules

The Blockchain Association said banks are trying to dismantle the law to protect their own business models. 

They argue stablecoins put deposits and credit markets at risk. In its letter, the association told Congress that those claims do not hold up against real data. U.S. bank deposits sit above $18 trillion, while global stablecoins are only $277 billion.

The letter emphasized that GENIUS guarantees full backing with one-to-one reserves. It also sets up federal oversight and regulatory clarity, encouraging innovators to keep their companies in the U.S. The group said removing these protections would push crypto development overseas.

The association argued that stablecoins actually help markets. They make settlement faster, cheaper, and available 24/7. They also support on-chain lending models that open new credit opportunities. This is competition, not a threat, the group stressed.

Blockchain Association Rallies Congress and Public

The Blockchain Association said it has launched a public campaign to raise awareness about the law. The goal is to get consumers and lawmakers to understand what is at stake. It called on members of Congress to resist pressure from banks and keep the law intact.

Kristin Smith, CEO of the Blockchain Association, said protecting GENIUS is key to keeping the U.S. a leader in financial innovation. The association is urging the public to speak up and share the message with policymakers.

The campaign includes educational materials explaining how stablecoins work and why they do not pose systemic risk. It also highlights benefits like reduced transaction costs and more efficient payments.

The letter closes by warning that rolling back the GENIUS Act would slow U.S. progress in building a modern financial system. The group told Congress the future of finance is being shaped now, and the U.S. must stay competitive.

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