Well, well, well… the GENIUS Act, freshly passed, is causing quite the stir among crypto enthusiasts-and not in the “let’s throw a party” kind of way. It’s the first stablecoin legislation in the U.S., but don’t get too excited, folks. Banking associations across the nation have decided this little piece of legislation might just have more holes than a Swiss cheese factory.
Rogue Stablecoins: Potentially More Dangerous Than a Caffeinated Squirrel
In a letter to the Senate Banking Committee, these associations, representing all 50 states, have raised their voices in unison. They’ve got a list of demands longer than a summer day, and one of them is a bit of an eyebrow-raiser. Their chief complaint? This stablecoin business could become a bit too wild if left unchecked.
One of the juicy tidbits in their letter is the call to shore up the prohibition on interest payments for stablecoins. Now, the law says no yield for stablecoin issuers, but they fear that exchanges or affiliates will find clever ways to “reward” holders, basically bypassing the rules and making things messy for the traditional banking system.
These banking groups are shaking their fists in the air, suggesting that Congress should tighten up the law to include everyone involved with stablecoins-exchanges, brokers, dealers, you name it. You know, just in case these folks start playing fast and loose with financial rules.
The Banking System’s Plea: “Please, Don’t Mess This Up!”
Then there’s Section 16(d) of the GENIUS Act, which some might say is a bit of a rebellious teenager in the world of financial regulation. This section allows financial institutions like Special Purpose Depository Institutions (SPDIs) to operate without approval from their host states. A bold move, but is it a good one? The banking associations think not, calling it a “bad idea” and urging lawmakers to do away with it.
They argue that the dual banking system, which has worked fine for decades, is vital for keeping the whole thing running smoothly. The financial world doesn’t need any more loopholes or wildcard institutions getting a free pass to play the game.
And just when you think it couldn’t get any spicier, they suggest that allowing nonfinancial companies to issue stablecoins could create all sorts of problems. They’ve got concerns about conflicts of interest and concentration of power, all the usual suspects.
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2025-08-16 07:13