{"id":58591,"date":"2026-01-07T09:21:57","date_gmt":"2026-01-07T02:21:57","guid":{"rendered":"https:\/\/hbbgroup.net\/us-community-banks-join-campaign-to-shut-a-genius-act-loophole\/"},"modified":"2026-01-07T09:21:57","modified_gmt":"2026-01-07T02:21:57","slug":"us-community-banks-join-campaign-to-shut-a-genius-act-loophole","status":"publish","type":"post","link":"https:\/\/hbbgroup.net\/zh\/us-community-banks-join-campaign-to-shut-a-genius-act-loophole\/","title":{"rendered":"US community banks join campaign to shut a GENIUS Act \u2018loophole\u2019"},"content":{"rendered":"
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A group of US community bankers is pressuring Congress to change the GENIUS Act to close a supposed \u201cloophole\u201d that allows yield-generating stablecoins to undercut banks.<\/p>\n

The American Bankers Association\u2019s Community Bankers Council said in a letter<\/a> on Monday to the Senate that it must tighten the stablecoin regulating bill passed last year to stop stablecoin issuers from offering yield to tokenholders through third parties.<\/p>\n

\u201cSome companies have exploited a perceived loophole allowing stablecoin issuers to indirectly fund payments to stablecoin holders through digital asset exchanges and other partners,\u201d the group of more than 200 community bank leaders said.<\/p>\n

The GENIUS Act<\/a> banned stablecoin issuers from offering interest or yield to holders, with lawmakers agreeing with the bank lobby that it could put such tokens in competition with bank savings accounts.<\/p>\n

However, exchanges such as Coinbase and Kraken offer rewards to those who hold certain stablecoins<\/a> on their platform, with the Community Bankers Council arguing that closing the loophole<\/a> was crucial as it impacts its banks\u2019 lending abilities.<\/p>\n

\u201cWith this activity, the exception swallows the rule,\u201d the group said. \u201cIf billions are displaced from community bank lending, small businesses, farmers, students, and home buyers in towns like ours will suffer.\u201d<\/p>\n

Source: <\/em>American Bankers Association<\/em><\/a><\/figcaption><\/figure>\n

The council argued that exchanges and a \u201cconstellation of stablecoin-affiliated companies are not designed to fill the lending gap\u201d and couldn\u2019t offer products insured by regulators.<\/p>\n

It asked lawmakers to put a prohibition on affiliates and partners of stablecoin issuers offering interest in crypto market structure legislation that is currently making its way<\/a> through Congress.<\/p>\n

Banks push for GENIUS Act changes<\/h2>\n

The council\u2019s letter is the latest push by a bank advocacy group to amend the GENIUS Act, with the Banking Policy Institute leading a cohort of groups that are pressuring lawmakers to take action.<\/p>\n

Related: <\/strong><\/em>Ethereum powers $8T in stablecoin transfers in Q4, smashing record<\/strong><\/em><\/a><\/p>\n

The institute, led by JPMorgan CEO Jamie Dimon, wrote to lawmakers<\/a> in August asking for the same claimed loophole to be closed, arguing it could trigger $6.6 trillion in deposit outflows from the traditional banking system.<\/p>\n

Two major crypto advocacy groups, the Crypto Council for Innovation and the Blockchain Association, rebuffed the banks<\/a> in a letter to the Senate Banking Committee that same month, arguing \u201cpayment stablecoins are not used to fund loans\u201d and that the revisions would stifle innovation and consumer choice.<\/p>\n

Magazine: <\/strong><\/em>How crypto laws changed in 2025 \u2014 and how they\u2019ll change in 2026<\/strong><\/em><\/a><\/p>\n