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Banking groups are urging Congress to close loopholes in the GENIUS Act that allow stablecoin interest payments, warning of a $6.6 trillion deposit flight risk. Major crypto firms like Paxos and Circle are already seeking national banking charters under the new law.
- Banking groups warn that GENIUS Act loopholes could lead to $6.6 trillion in deposit outflows from traditional banks to yield-bearing stablecoins.
- Major crypto firms like Paxos and Circle are filing for national banking charters, signaling industry momentum under the new regulatory framework.
- Experts suggest the immediate threat to banks is limited, but advocate for clearer SEC/CFTC guidelines on crypto lending to prevent regulatory gaps.
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