A coalition of 125 crypto groups is pushing back against a U.S. Senate effort that could tighten compensation rules for stablecoins.
The debate focuses on whether Congress should extend the GENIUS Act’s ban beyond stablecoin issuers to platforms and apps.
Industry leaders have warned that changing the rules now could hurt consumers and push payments back to traditional banks.
A new policy battle is taking shape in Washington.
more 125 crypto and fintech organizationsled by blockchain associationhe urged. US Senate Banking Committee veto efforts to expand stablecoin reward limits based on genius act. The group warns that expanding the rules will harm consumers, slow innovation and give traditional banks an unfair advantage.
The letter was sent this week to Tim Scott, Senate Banking Committee Chairman and Ranking member Elizabeth Warrenrebels against proposal to reinterpret stablecoin ban law “Interest or yield?”
What is and is not allowed under the GENIUS Act?
GENIUS law specifically prohibits it. stablecoin issuer There will be no need to pay interest to token holders. But the coalition says Congress intentionally allowed it. Platform and third parties To provide legitimate rewards and incentives.
“That difference was no coincidence.” The letter argues that expanding the ban would have the following effects: “Reopen a resolved issue” and disrupt carefully negotiated compromises.
Cryptocurrency organizations say this is a fundamental change to the way stablecoins can compete in payments.
Banks warn of deposit risks – cryptocurrencies rebound
Banking organizations argue that stablecoin rewards could drain deposits from the banking system and negatively impact lending, especially at regional banks. Some estimates predict that there may be up to a deposit outflow. $6.6 trillion.
The Coalition disputes these claims and points out the following: Charles River Associates Research it was found There is no evidence of disproportionate deposit outflows from regional banks between 2019 and 2025..
They also note that banks are currently approx. $2.9 trillion in reserves The ability to earn interest at the Federal Reserve raises questions about whether deposit constraints are the real problem.
“Opposition to stablecoin rewards reflects protection of existing revenue models rather than safety and soundness concerns.” The letter says:
3/ Efforts to limit stablecoin rewards in the midst of productive bipartisan cooperation on market structure legislation would reopen broken compromises, create uncertainty in regulatory implementation, and undermine confidence in newly enacted financial legislation.
— Blockchain Association (@BlockchainAssn) December 18, 2025
Why stablecoin rewards matter now
The average yield on checking accounts is almost similar. 0.07% and nearby savings accounts 0.40%the coalition argues that stablecoin rewards help platforms share value directly with users, especially in high-rate environments.
The group also warned that reopening the issue before GENIUS rules are developed could undermine confidence in crypto regulation.
“If Congress passes a bill and it is signed into law, it raises the question of how much certainty that would actually bring to the market, even if we could reopen immediately.” said Blockchain Association CEO Summer Marsinger.
This is an important battle for the industry. Stay tuned to Coinpedia for more information
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