The crypto industry is increasingly anti-aggressive against Wall Street bankers’ bids to rewrite the US. The new stablecoin law law argues that it seeks to establish guidelines and national innovation in the US national innovation (genius) law.
In a letter to the Senate Banking Committee leaders dated August 19, the Crypto Innovation Council and the Blockchain Association urged lawmakers to remove and reject any proposals to ban section 16(d) of the law provided by the American Bankers Association, the Institute of Banking Policy and affiliates of the Stablecoin Issuers.
In Section 16(d), the subsidiaries of state-characterized institutions allow the submission of money across the state line to assist the stubcoin issuer’s activities, allowing holders to redeem national tokens without the need for separate state licenses.
The banking group warned earlier this month that it would allow the state’s distinctive, uninsured institutions to be allowed to be stylized and operated nationwide.
They also argued that the law includes a loophole by prohibiting the issuer themselves from providing interest, but does not prevent affiliates or exchanges from doing so.
A letter from Crypto Groups on August 19 dismissed these fears as not supported by observed data. Citing a July 2025 survey by Charles River Associates, the group said there was no statistically significant link between Stablecoin recruitment and community bank deposit outflows.
Instead, they pointed out, most stubcoin reserves remain within the financial system of commercial banks and the Treasury securities and continue to support lending.
They also argued that by allowing affiliates to share rewards with Stablecoin users, it ensures fair competition, especially for consumers in banks that are underserved by traditional banks.
Currently, the average US checking account pays APY of 0.07%, far below inflation, but the Federal Reserve benchmark interest rate is between 4.25% and 4.50%.
“Eliminating these features of Stablecoin users will tilt the arena in favour of legacy institutions, while allowing them in the banking sector,” the group wrote.
The Genius Act is a law, but the digital asset market clarity has already been passed in the House and is now a broader crypto market framework in the Senate, which could restructure Stablecoin policies before regulators draft implementation rules.
Bankers have seized the process to push the agenda up, but the crypto groups are lobbying to keep the law intact.
Senate Bank Chairman, Republican Tim Scott, South Carolina, said this week he expects the bill to be finalised by the end of September, and that he believes that as many as 18 Democrats can vote for it. However, he acknowledged the possible resistance from Massachusetts Democrat Sen. Elizabeth Warren and her allies.
The versions that appear must be settled with the House of Representatives’ digital assets market clear acts, allowing regulators to wish to amend stablecoin’s provisions to the opening banker before they begin writing the rules.
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