The "GENIUS Act" sparks regulatory controversy, with the banking industry warning about stablecoin interest loopholes

ChainCatcher news reports that, according to Crypto In America, Section 16(d) of the U.S. "GENIUS Act" has sparked regulatory controversy. This provision allows certain state-chartered banks to bypass state-level approval to conduct nationwide business under federal oversight. Organizations such as the State Bank Regulatory Association have jointly written to the Senate Banking Committee, warning that this provision undermines state regulatory authority and could jeopardize the stability of the financial system.

Banking groups also pointed out that while the bill prohibits stablecoin issuers from paying interest, institutions such as exchanges may circumvent the regulations, potentially leading to a maximum outflow of $6.6 trillion in bank deposits. Coinbase's policy director countered that this data lacks basis.