GENIUS Act changes would be a ‘national security trap’: Crypto execs
Pro-crypto lawyer John Deaton argued that banning yield on stablecoins would incentivize the use of China’s interest-bearing digital yuan, hurting the US dollar.
The bank lobby’s requested changes to the stablecoin-regulating GENIUS Act could undermine competition and weaken the US dollar’s global position, crypto executives and industry groups have claimed.
Crypto advocacy group the Blockchain Association said on Tuesday that a bid to lawmakers by a group of community bankers to ban issuers from offering yield to tokenholders through third parties was “a last-ditch effort by Big Banks to block competition after Congress struck a careful, bipartisan deal.”
The GENIUS Act bans stablecoin issuers from offering interest or yield, but major crypto exchanges are still rewarding stablecoin holders, and community banks argued that closing the claimed loophole is crucial for protecting their lending abilities.