The GENIUS Act represents something increasingly difficult to find in Washington: genuine bipartisan consensus on complex financial policy. After months of negotiations and compromises, Congress unveiled a stablecoin framework designed to protect consumers, support innovation, and reinforce the dollar’s global leadership. Now, just as regulators begin the hard work of implementation, some in the big bank lobby want to reopen already resolved issues, using current market structure legislation to introduce amendments to the GENIUS Act. That approach risks undermining both efforts.
Implementation of the GENIUS Act will not be simple or quick. The Treasury Department’s Office of the Comptroller of the Currency and other federal stablecoin regulators face a technically demanding agenda: defining reserve composition standards, establishing audit and disclosure requirements, setting licensing and capital expectations, and tailoring anti-money laundering and sanctions regimes to stablecoin issuers. Each of these decisions will determine how stablecoins are issued in practice.
The agencies have only just begun this process, a process that will take time, public participation, and careful consideration, and will extend well into 2026. Nothing prohibits big banks from participating in the rulemaking process like everyone else.
The big bank lobby is pressuring Congress to short-circuit that process by legally prohibiting third parties from offering returns or rewards for holding users’ stablecoins. If successful, banks would effectively end the competitiveness of the stablecoin industry.
The central argument – that greater adoption of stablecoins will lead to a flight of deposits or create systemic risk – does not stand up to scrutiny. The stablecoins regulated by the GENIUS Act are fully backed by cash reserves and short-term Treasury bonds. Stablecoins do not participate in the transformation of maturities, do not grant credit, or rely on leverage. In fact, the assets that back regulated stablecoins are among the safest in the financial system – the same assets that banks themselves turn to in times of stress.
Stablecoin rewards programs also do not differ significantly from other incentives used to encourage consumers to use a particular platform. Consumers have long received rewards from third-party financial platforms (from brokerage cash management accounts to payments apps) for using their services. The incentives offered by an exchange or fintech platform for holding stablecoins are not materially different from cash bonuses for using a certain credit card or mileage benefits for booking flights with a specific airline. The GENIUS Act ensures that the issuer or asset itself cannot provide stablecoin rewards; They can only be offered by third parties on a discretionary and totally optional basis.
Stablecoins rewards programs put more money in the pockets of American consumers. If banks are not willing to offer their own pro-consumer programs, it is natural for consumers to look for alternative services. When given the right incentive, consumers already move funds freely between banks, money market funds, brokerage accounts, and payment apps. That mobility is not a flaw: it is a hallmark of a competitive financial system. Furthermore, claims about leaking deposits deserve special skepticism. There is no evidence that greater adoption of stablecoins will displace large-scale insured bank deposits. When consumers use stablecoins, they do so primarily for payments, settlements, and cross-border transactions, areas where traditional systems remain slow and expensive.
Congress took all of this into careful consideration when drafting the GENIUS Act. They intentionally prohibited issuers from offering yield, but preserved the ability of third parties to offer rewards. House Financial Services Chairman French Hill has acknowledged that issues surrounding packaging, distribution and third-party programs are best addressed through the regulatory process currently underway at Treasury.
That’s exactly the point. Congress has already made the policy decision to empower regulators to resolve these issues during rulemaking.
There is also a broader risk that, if bipartisan deals like the GENIUS Act can be immediately reopened whenever an established industry doesn’t like their competitive implications, legislative compromise will become impossible. Relitigating stablecoin policy while negotiations over market structure and the implementation of GENIUS are underway threatens both efforts. It notes that carefully negotiated legislative agreements are provisional and invites defection from bipartisan coalitions.
The responsible path forward is clear. Treasury should be allowed to complete implementation of the GENIUS Act, resolving the complex technical issues that Congress deliberately left to regulators. In the meantime, Congress should continue to focus on market structure legislation without pushing to include language revising already resolved issues.
After the implementation produces data on stablecoin usage and regulators gain experience with digital assets, Congress will be able to evaluate whether specific modifications are warranted. That sequence respects both the legislative process that produced the GENIUS Act and the regulatory process required to make it work.
Congress passed the GENIUS Act with strong bipartisan support rarely seen in Washington. This vote reflected thoughtful negotiations that took into account relevant risks and put consumers above all. To honor this work, implementation must come before amendment. This is how Congress preserves bipartisan trust and ensures crypto market structure legislation succeeds.
