Banks push to block stablecoin legislation over market share fears

Bankers and their allies successful the US Senate are pushing backmost against the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act implicit fears that stablecoins volition disintermediate banks and erode banking marketplace share.

According to an article from American Banker, the measure requires 60 votes to walk successful the Senate, meaning that astatine slightest 7 Democrats volition person to ballot with Republicans to propulsion done the Act.

This could beryllium a hard proposition, arsenic US Senator Elizabeth Warren, 1 of crypto’s staunchest governmental critics, is proposing an amendment prohibiting tech firms from issuing stablecoins. Warren wrote:

“If these firms privation to prosecute successful payments, they indispensable spouse with, oregon facilitate transactions among, regulated fiscal institutions. But this stablecoin measure breaks that presumption quo by green-lighting large tech companies and different commercialized conglomerates to contented their ain stablecoins.”

Digital assets proceed to beryllium a disruptive unit successful concern and banking owed to near-instant colony times and cheaper transaction fees, which importantly trim the load of cross-border payments and present peer-to-peer transactions.

Page 1 of the GENIUS Act of 2025. Source: US Senate

Related: The GENIUS stablecoin measure is simply a CBDC trojan equine — DeFi exec

Stablecoins: The mode guardant for USD successful the 21st century?

The GENIUS stablecoin measure was introduced by Senator Bill Hagerty connected Feb. 4 arsenic a broad regulatory model for tokenized US dollars.

Shortly aft the measure was introduced to the US Senate, Federal Reserve Bank Governor Christopher Waller said non-banks should beryllium allowed to contented stablecoins.

Waller argued that stablecoins could grow outgo usage cases, peculiarly successful the processing world, owed to their cost-savings and efficiency.

Stablecoin fees vs. bequest outgo processing solutions. Source: Simon Taylor

Bank of America CEO Brian Moynihan told an assemblage astatine the Economic Club of Washington DC that the slope may participate the stablecoin business — apt launching its ain dollar-pegged unchangeable token.

During the archetypal White House Crypto Summit connected March 7, Treasury Secretary Scott Bessent said the US volition use stablecoins to widen US dollar dominance.

Overcollateralized stablecoin issuers are collectively the 18th largest buyers of US authorities indebtedness successful the satellite — putting these firms up of countries similar Germany and South Korea.

By adopting pro-stablecoin policies and promoting stablecoin usage worldwide, the US authorities tin usage stablecoins arsenic a sponge to soak up ostentation and support the dollar’s presumption arsenic the planetary reserve currency.

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