Two crypto advocacy groups, Crypto Council for Innovation and Blockchain Association, oppose US banking groups’ recommendations to tighten the GENIUS Act, citing concerns over stablecoin yield loophole and potential impact on traditional bank deposits. The groups argue that stablecoins are not bank deposits and should not be subject to the same regulations.

Banking groups claim that stablecoin issuers could indirectly offer yields through exchanges or affiliates, giving them a competitive edge over traditional banks. They argue that this could drain up to $6.6 trillion from bank deposits, affecting credit flow to households and businesses. Crypto groups warn against stifling innovation and consumer choice.

Yield-bearing stablecoins have paid out over $800 million in total returns, with Ethena Staked USDe leading payouts in the past 30 days. The total market cap of stablecoins stands at $288 billion, a fraction of the $22 trillion US dollar money supply reported by the Federal Reserve.

Read more at Cointelegraph: Crypto Groups Push Back on Bank Lobby Over GENIUS Act