Two of the crypto trade’s main advocacy our bodies are pushing again towards Wall Road bankers’ newest try to roll again the US’ newly minted stablecoin legislation.
In a joint letter to the Senate Banking Committee on Tuesday, the Crypto Council for Innovation (CCI) and the Blockchain Affiliation urged lawmakers to reject suggestions from the American Bankers Affiliation (ABA) and state banking teams.
As reported, a number of US banking teams, led by the Financial institution Coverage Institute (BPI), have urged Congress to tighten the GENIUS Act by closing what they name a loophole that might enable stablecoin issuers and their associates to pay yields not directly.
In a letter despatched final Tuesday, the teams warned that failing to deal with the hole may drain as a lot as $6.6 trillion from conventional financial institution deposits, threatening the circulate of credit score to households and companies.
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Stablecoin yield loophole
The bankers additionally argued that whereas the GENIUS Act bans stablecoin issuers themselves from providing yield, it doesn’t explicitly stop exchanges or associates from doing so on their behalf. They claimed this dangers giving stablecoins a aggressive edge by attracting customers with returns much like financial savings accounts, with out subjecting them to the identical banking guidelines.
The crypto teams accused the banking foyer of making an attempt to re-litigate points already settled in months of negotiations, warning that the proposed revisions would tilt the sphere towards conventional banks whereas stifling innovation and shopper alternative.
“Fee stablecoins aren’t financial institution deposits, or cash market funds, or funding merchandise, and thus they aren’t regulated in the identical approach,” the crypto advocacy teams wrote. “In contrast to financial institution deposits, fee stablecoins aren’t used to fund loans,” they added.
The letter identified Part 16(d) of the legislation, which permits subsidiaries of state-chartered establishments to conduct stablecoin enterprise throughout state traces with out requiring extra licenses.
Banking teams need the clause repealed, however CCI and the Blockchain Affiliation argued that scrapping it could re-create “the identical fragmented, balkanized regulatory regime that stifles interstate commerce.”
Additionally they pushed again towards claims that yield-bearing stablecoins may drain deposits from neighborhood banks. They cited a July 2025 evaluation by Charles River Associates, which discovered no vital hyperlink between stablecoin progress and financial institution outflows.
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Yield stablecoins cross $800 million in payouts
Yield-bearing stablecoins have distributed over $800 million in complete returns to holders to date, based on a latest publish by StableWatch. Over the previous 30 days, Ethena Staked USDe (sUSDe) led payouts with $30.71 million, adopted by Securitize’s BUIDL at $8.39 million and Sky Ecosystem’s staked USDe (sUSDe) with $6.78 million.
The full market cap of stablecoins at the moment sits at $288 billion, a fraction of the US greenback cash provide, which the Federal Reserve reported as $22 trillion on the finish of June.
Journal: Bitcoin vs stablecoins showdown looms as GENIUS Act nears
