Wall Street Seeks Amendments to GENIUS Act Stablecoin Rules
- Wall Street and advocates urge GENIUS Act revisions.
- Potential regulatory arbitrage risks are highlighted.
- Bill could shift billions from traditional deposits.
Wall Street and consumer advocates have allied to push for revisions to the GENIUS Act, highlighting potential risks for consumers and traditional banks across the U.S.
The collaboration underscores concerns over potential regulatory loopholes that could affect financial stability, consumer protection, and the competitive landscape in the stablecoin market.
Wall Street and consumer advocacy groups are urging revisions to the GENIUS Act, highlighting concerns over potential regulatory arbitrage. The act allows non-traditional entities to offer stablecoin services nationwide, which could disadvantage existing financial frameworks.
The American Bankers Association and consumer groups are concerned about provisions enabling nonbank entities to operate without state licensing. Senators Hagerty, Scott, Gillibrand, and Lummis support the act’s broader digital asset goals while responding to industry concerns.
Immediate effects include potential shifts in how stablecoins are regulated and managed. Analysts suggest the act could drive capital into U.S.-regulated stablecoins, leading to a possible change in financial practices for both banks and crypto firms.
If unchanged, the act might enable new stablecoin interest products, which could reduce deposits in traditional banks. This is a pressing issue for banks concerned about potential financial and operational disruptions.
The act’s circulation has stirred debate over its impact on both the finance sector and consumer protection measures. Industry leaders have voiced concerns due to its potential effects on financial stability.
“The GENIUS Act will make America the undisputed leader in digital assets, bringing massive investment and innovation to our country,” said Donald J. Trump, 45th President of the United States.
Historical trends suggest that legislation like the GENIUS Act can influence both regulatory landscapes and technological innovation. The absence of executive feedback from major crypto projects further underscores industry uncertainty amidst regulatory changes.
