Crypto Lobby Fights Back Against Bank Push to Rewrite Stablecoin Law

Crypto advocacy groups are pushing back hard against Wall Street's attempts to amend the recently enacted GENIUS Act, warning that the proposed changes would tip the scales in favor of traditional banks while undercutting competition and innovation. Industry organizations, including the Crypto Council for Innovation and the Blockchain Association, delivered a letter to Senate Banking Committee leaders, urging them to preserve key provisions, especially Section 16(d), which enables subsidiaries of state-chartered institutions to transmit money across states on behalf of stablecoin issuers—avoiding the need for multiple state licenses.

Banking groups, such as the American Bankers Association and Bank Policy Institute, argue that revisions are necessary to close loopholes that could allow issuers and their affiliates to offer yield programs, potentially diverting trillions from bank deposits and threatening credit flow. Crypto advocates counter that these changes could limit consumer choice, particularly for the underbanked, and reduce the resilience of financial access. They argue that payment stablecoins serve unique roles distinct from deposits or money market instruments.

The push has become more urgent because, although the GENIUS Act is already law, Congress still has opportunities to reshape its implementation before it takes full effect. The outcome of this lobbying battle may determine whether the stablecoin framework remains open and innovation-friendly—or becomes skewed toward established banking interests.