Crypto Advocates Challenge Banking Industry Over GENIUS Act

The newly passed GENIUS Act has already sparked a clash between America’s banking sector and leading crypto advocate groups. Signed into law by President Donald Trump last month , the Act was designed to create a legal framework for stablecoins, encourage competition, and expand financial access. While the country’s largest banking groups argue that the law needs fixes, the Blockchain Association (BA) and the Crypto Council for Innovation (CCI) say the law should stand as written. U.S. Banking Industry Call for Fixes in GENIUS Act At the heart of the debate is the contest between banks and innovators over the future of money. The banking industry, led by the American Bankers Association (ABA), sent a letter last week urging Congress to amend the law. Their main complaint is that the GENIUS Act does not fully block stablecoin issuers from offering interest-like returns. They argue this gap could let exchanges and affiliates turn stablecoins into investment products, creating risks normally tied to bank deposits and credit. The banks also raised concerns about state-level oversight and the role of non-financial companies in issuing stablecoins. In their view, tighter rules are needed to protect financial stability . They argue that without changes, stablecoins could evolve into investment products, distorting the payments system and creating new risks. Crypto Advocate Groups Oppose the Idea On August 19, BA and CCI delivered their response to the Senate Banking Committee. They warned that revisiting the law now would weaken it and would tilt the crypto market back toward traditional finance. The groups said the GENIUS Act was designed to open the market and give consumers more options. To them, these demands look less like consumer protection and more like an effort to secure the banks’ dominance. They argued that placing more limits on stablecoins would take away the features people find useful in digital wallets. This matters most for local banking communities, which depend on them for everyday payments and savings. GENIUS Act Sparks Growth in Stablecoin Market Since the GENIUS Act became law, the stablecoin market has picked up new energy. With clearer rules in place, issuers and investors feel more confident, driving up trading volumes and increasing wallet use. Experts point out that the law has removed much of the regulatory uncertainty that once slowed innovation . Developers can now build products without worrying about sudden legal pushback. The Act has also created space for more companies to join the stablecoin market. Payment platforms, fintech firms, and even non-financial businesses can now issue or use stablecoins within an approved framework. The post Crypto Advocates Challenge Banking Industry Over GENIUS Act appeared first on TheCoinrise.com .