Coalition Urges Lawmakers to Safeguard Stablecoin Rewards
A coalition of over 125 groups, including prominent companies and organizations in the digital asset and fintech industries, are urging lawmakers to safeguard stablecoin rewards amid concerns that efforts to reinterpret the GENIUS Act could limit consumer options and stifle competition.
Concerns Over the GENIUS Act
The Blockchain Association, a Washington D.C.-based trade organization advocating for the blockchain and cryptocurrency sectors, recently dispatched a letter to Congress, specifically addressing Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, highlighting the potential issues that could arise from reinterpreting the law’s stablecoin reward provisions.
The letter, sent on December 18, warns that limiting or eliminating lawful stablecoin incentives would reduce monetary benefits for consumers, diminish their choices, and hinder competition within the financial sector.
Lindsay Fraser, the chief policy officer at the Blockchain Association, emphasized this message on social media, stating, “More than 125 organizations are unified against changes that would decrease consumer choices and financial incentives. When Congress enacted the GENIUS Act, they established a beneficial framework for consumers.”
Importance of the GENIUS Act’s Framework
Signatories of the letter pointed out that Congress had intentionally distinguished between the payment of interest by stablecoin issuers and the ability of various platforms and third parties to create valid reward programs. This balance was central to the GENIUS Act, designed to prevent risks associated with stablecoin issuance while also encouraging innovation at the application level.
The coalition argues that proposals aimed at restricting rewards would unfairly disadvantage stablecoins compared to traditional banking systems that often provide incentives, despite their inherent risks associated with lending practices.
Support from Industry Leaders
Among the letter’s supporters are notable organizations such as the Crypto Council for Innovation, the American Fintech Council, and widely recognized companies like Coinbase, Ripple, and Paypal, alongside a multitude of regional blockchain advocacy groups. These entities collectively express their concern that any change to the GENIUS Act would disrupt the established equilibrium that benefits consumers and allows the market to thrive.
The coalition concluded its correspondence by reinforcing the potential negative effects on consumers and competition should Congress decide to revisit the provisions surrounding stablecoin rewards. They encouraged lawmakers to reject any movements aimed at constraining these lawful incentives, stating, “Maintaining the balance reached by Congress is crucial for consumer protection and the facilitation of innovation in the market.”
Additionally, the coalition referenced research indicating that stablecoin integration has not negatively impacted community banks significantly and pointed out the substantial reserves already held by banks at the Federal Reserve.
Benefits of Payment Stablecoins
Supporters maintain that payment stablecoins—characterized by reduced transaction costs, expedited settlement times, and increased transparency—can enrich consumer options while remaining compliant with existing regulatory guidelines established by Congress.
This appeal by a diverse array of industry leaders underscores a vital ongoing discussion about the future of cryptocurrency regulation in the United States and the importance of preserving consumer benefits within the evolving landscape of digital finance.
