Current conflict between the crypto lobby and banks regarding the stablecoins law (the GENIUS Act in the U.S.) is a battle that could define the future of digital finance.

1. What is the GENIUS Act?

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed by President Trump in July 2025, establishing a federal regulatory framework for stablecoins in the U.S. This regulation requires backing in liquid assets (such as dollars and Treasury bonds) and mandates issuing companies to publish reserves monthly.

2. Banking lobby initiative

Major banking associations, such as the American Bankers Association (ABA) and the Bank Policy Institute (BPI), are urging the Senate to modify or eliminate key parts of the law, claiming:

That allowing non-bank issuers to operate at a national level could be a form of regulatory arbitrage that undermines state authority.

That yield programs, even if offered by affiliates and not direct issuers, could divert up to $6.6 trillion USD of bank deposits, affecting credit and loans.

3. Response from the crypto industry

Crypto advocacy groups such as the Crypto Council for Innovation and the Blockchain Association have sent a letter to the Senate Banking Committee requesting that they reject these requests from banks, arguing that:

Changing the law now would threaten fair competition, limiting options for consumers, especially the unbanked.

Section 16(d), which allows state entities issuing stablecoins to operate on a national scale, is key to ensuring redemption rights for users without each state imposing separate licenses.

The banking arguments about deposit flight risk are inflated and do not reflect real data.

4. Broader context

The White House has already shown its support for stablecoins through the GENIUS Act, recognizing their potential to strengthen the financial system and foster greater institutional adoption.

Moreover, the U.S. Treasury, with the new regulatory framework, seeks to integrate stablecoins as tools that could boost demand for Treasury bonds.