Banks Feel Stablecoins Could Pose an Existential Threat to Them
The introduction of the GENIUS Act, which officially regulates stablecoins, has stirred new friction between banks and the cryptocurrency sector. Traditional financial institutions are sounding alarms that the law could encourage massive movement of funds out of banks and into digital assets, potentially shifting trillions of dollars. Major banking groups, including the American Bankers Association, are redirecting their lobbying efforts to secure changes in the legislation. Their primary concern is the possibility of customers choosing stablecoins over bank deposits, particularly if crypto platforms continue offering attractive yields. The GENIUS Act prevents issuers themselves from paying interest on customer deposits. However,…
