- Over 125 crypto organizations oppose expanding stablecoin yield restrictions under the GENIUS Act.
- Industry groups warn that limiting rewards could reduce consumer choice and favor traditional banks.
- Stablecoin incentive programs are likened to credit card rewards, supporting adoption and household financial resilience.
The Blockchain Association and 125 other crypto and fintech organizations have formally opposed the extension of stablecoin reward limits imposed by the GENIUS Act.
The letter was submitted to the Senate Chairperson Scott and the Senate Ranking Member Warren. According to them, increasing the yield limit applied to layers and third-party platforms will hamper innovation while giving an edge to conventional banks.
According to the coalition, the rewards structure of stablecoins is similar to that for credit cards. They enable a person to benefit from their holdings without posing a significant risk to the balance sheets.
If such rewards are small, they say, the use of stablecoins within digital payment systems may dwindle.
Consumer Impact of Low-Yield Accounts
The group also mentioned the implications of this for people. Currently, the federal funds rate is at 3.50%-3.75%. The rates for checking and savings accounts are at 0.07% and 0.40%, respectively.
The reward programs offered by stablecoins appear to be very attractive to families wishing to preserve their purchasing power as prices increase.
Research analyses, coupled with a report filed by Charles River Associates, examined stablecoin adoption between 2019 and 2025, and there was nothing to suggest that stablecoin schemes drained deposits from community banks.
The report also highlighted that U.S. banks park $2.9 trillion in reserves with the Federal Reserve, indicating that stablecoins do not create any liquidity concerns.
The opponents of stablecoin rewards are, in fact, protecting traditional banking revenue streams, as shown in the letter.
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Potential Impact of Expanding Crypto Restrictions
The industry associations argue that this will disrupt the balance that Congress has carefully crafted in the GENIUS Act.
The act prohibits the payment of interest by stablecoin issuers to their users, although it allows other legal platforms to offer similar benefits.
Extending the prohibition at this time may lead to instabilities in the marketplace, reduced competition in payment services, and adversely affect new digital payment technologies.
Stablecoins are quicker at settling, cheaper to transfer, and more transparent compared to the old ways.
The reward programs are essential in encouraging the usage, maintaining a level of fair competition, and ensuring bipartisan support for the passage of market structure legislation.
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