Crypto executives warn yield ban may weaken dollar and boost foreign digital currencies
Proposed changes to the GENIUS Act, which governs stablecoin regulation in the United States, are drawing criticism from crypto executives and industry groups who argue the revisions could undermine competition and threaten national security.
Industry advocates say efforts by community banking groups to close loopholes around stablecoin rewards would unfairly restrict innovation. While the GENIUS Act already prohibits stablecoin issuers from offering interest directly, crypto platforms currently provide rewards through third-party mechanisms. Bank lobbyists claim this threatens traditional lending, but industry groups dispute that assertion.
According to crypto advocates, there is no evidence that stablecoin adoption has weakened banks, noting that low-yield bank accounts primarily benefit large institutions, while stablecoin rewards expand access to yield for everyday users.
Critics warn that banning yield entirely could have geopolitical consequences. Pro-crypto legal experts argue such a move would push global users toward alternative digital currencies, including China’s interest-bearing digital yuan, potentially eroding the U.S. dollar’s competitive position in digital finance.
Industry leaders also cautioned that rolling back reward provisions would reverse bipartisan progress on stablecoin regulation. They argue that innovation, not protectionism, is essential for maintaining U.S. leadership in financial technology.
As debate intensifies, crypto executives stress that the GENIUS Act was designed to balance safety, innovation, and competitiveness, warning that restrictive amendments could turn a regulatory victory into a strategic liability.
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