🚨💰 BPI Sounds Alarm: GENIUS Act’s Stablecoin Yield Loophole Could Trigger $6.6T Bank Deposit Exodus!
The Bank Policy Institute (BPI) warns that a hidden “💹 Yield Loophole” in the newly-passed GENIUS Act could shake the U.S. banking sector to its core.
While the law bans stablecoin issuers from directly paying interest, it does NOT stop their 🤝 affiliates or crypto exchanges from offering rewards — a gap that could drain 💵 $6.6 trillion from traditional banks into stablecoins.
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🔍 What’s the Loophole?
📜 GENIUS Act = Guiding and Establishing National Innovation for U.S. Stablecoins Act.
❌ Direct yield by issuers → BANNED.
✅ Indirect yield via affiliates/exchanges → ALLOWED.
💡 Example: Users could hold stablecoins like USDC on platforms such as Coinbase or Kraken and earn rewards — bypassing the rule.
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⚠ Why Banks Are Panicking
🏦 Loss of deposits → less liquidity for loans.
📉 Fewer loans → higher interest rates & slower business growth.
🌪 In financial stress, this could amplify instability and trigger credit crunches.
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📊 Possible Impact
💸 $6.6 Trillion may shift from banks to stablecoins.
🚪 Businesses & consumers could face tight credit.
📈 Crypto’s influence could skyrocket, weakening traditional banking dominance.
🏛 Lawmakers may be forced to amend the Act before a market disruption hits.
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🗣 Banking Industry’s Demand
BPI + American Bankers Association + Consumer Bankers Association → calling on Congress to
🔒 Close the loophole so ALL affiliates & partners are also banned from offering yield — not just issuers.
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✅ Bottom Line:
The GENIUS Act was meant to stabilize stablecoins 🪙… but its yield loophole might instead spark a banking liquidity crisis, shift trillions into crypto, and reshape America’s financial future. The clock is ticking ⏳ — Congress must act before the loophole turns into a financial earthquake 🌍💥.