U.S. community banks are urging lawmakers to close a perceived “loophole” in the GENIUS Act that allows crypto exchanges to offer yield on stablecoins, arguing it creates unfair competition with traditional banks and could accelerate deposit outflows.U.S. community banks are urging lawmakers to close a perceived “loophole” in the GENIUS Act that allows crypto exchanges to offer yield on stablecoins, arguing it creates unfair competition with traditional banks and could accelerate deposit outflows.
U.S. Community Banks Push to Close GENIUS Act Stablecoin “Yield Loophole”
News Brief
U.S. community banks are urging lawmakers to close a perceived “loophole” in the GENIUS Act that allows crypto exchanges to offer yield on stablecoins, arguing it creates unfair competition with traditional banks and could accelerate deposit outflows.
Summary
U.S. community banks are urging lawmakers to close a perceived “loophole” in the GENIUS Act that allows crypto exchanges to offer yield on stablecoins, arguing it creates unfair competition with traditional banks and could accelerate deposit outflows.
What Banks Are Objecting To
- Stablecoin yield products offered by exchanges
- Ability to provide interest‑like returns without being banks
- Potential for consumers to treat yield‑bearing stablecoins as deposit substitutes
Banks argue this activity looks economically similar to deposits but operates outside the full banking regulatory framework.
Why This Matters
- Competitive pressure: Yield‑bearing stablecoins can attract funds away from community banks
- Regulatory boundary debate: Where to draw the line between payments, securities, and banking
- Policy precedent: How this issue is resolved could shape the future of on‑chain finance in the U.S.
At stake is whether stablecoin issuers and exchanges can compete on yield without bank charters.
The Counterargument
Crypto advocates contend that:
- Stablecoin yields often come from market activity or reserves, not lending deposits
- Users are not guaranteed principal the same way bank deposits are
- Innovation should not be constrained to protect incumbents
They argue consumer disclosure—not prohibition—is the right approach.
Broader Implications
- Could influence final GENIUS Act language
- May determine whether stablecoins evolve into cash‑like instruments or yield‑bearing financial products
- Signals rising tension as crypto competes directly with traditional banking services
Bottom Line
Community banks’ push to close the GENIUS Act’s stablecoin yield “loophole” highlights a core conflict: stablecoins are starting to compete with bank deposits. How lawmakers respond will shape whether yield remains a feature of U.S.‑regulated stablecoins—or is pushed back into the traditional banking system.
Market Opportunity
Union Price(U)
$0.002128
$0.002128$0.002128
USD
Union (U) Live Price Chart
Disclaimer: The articles published on this page are written by independent contributors and do not necessarily reflect the official views of MEXC. All content is intended for informational and educational purposes only and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC. Cryptocurrency markets are highly volatile — please conduct your own research and consult a licensed financial advisor before making any investment decisions.
You May Also Like
qLabs Fires First Shot in Quantum Crypto Race — Can Coinbase Catch Up?
The rapid progress of quantum computing is forcing the cryptocurrency industry to confront the problem that has long been treated as theoretical.
Blockchains th
Share
CryptoNews2026/01/30 22:53
Slate Milk Raises $23 Million Series B Round To Bolster Protein Drink’s Rapid Growth
The post Slate Milk Raises $23 Million Series B Round To Bolster Protein Drink’s Rapid Growth appeared on BitcoinEthereumNews.com. Slate Classic Chocolate milk shake Slate A new slate of functional beverages is about to dominate the ready-to-drink shelf, ushering in a more modern era of easily incorporating more protein in our diets. Today, Slate Milk cofounders Manny Lubin and Josh Belinsky reveal the brand has raised a $23 million Series B funding round. Led by Foundership, a new fund by Yasso frozen greek yogurt cofounders Drew Harrington and Amanda Klane, the money will allow Slate to continue its momentum towards ubiquity as it hits 100,000 points of distribution across 20,000 stores nationwide by the end of 2025. Slate also reveals that it is rolling out several line extensions including a 20 gram protein Strawberry milk at Sprouts Farmers Market, a 30 gram protein Cookies & Cream milk at Target, and a 30 gram protein Salted Caramel flavor at Walmart and Albertsons banner stores. New “Ultra” 42 gram protein options in Chocolate, Vanilla and Salted Caramel will also be available in retailers across the country. “Stores where we may have just had our ready-to-drink lattes, now we’re adding our shakes, and vice versa. We’re adding new partners and executing deeper with our existing partners,” Lubin tells me. The impressive growth is due to Slate’s early entry into the high-protein product space slightly before it caught mainstream attention–ready to execute immediately once consumers craved it most. Slate’s macronutrient ratios are practically unbeatable, largely due to the utilization of ultra-filtered milk. It’s a protein drink that writes a new script about who protein drinks are for. “We’re not sons of dairy farmers. We had no milk history,” Lubin says “We’re just a couple of dudes from the burbs of Boston who like chocolate milk.” Slate cofounder Manny Lubin Slate Another Clean Slate Slate’s brand has evolved significantly in just the past six…
Share
BitcoinEthereumNews2025/09/19 03:08
The Anatomy of a Self-Made Billionaire’s Mindset: How Gurhan Kiziloz Reached a $1.7B Net Worth
There are many paths to wealth in the modern economy, but the one Gurhan Kiziloz took stands out for a simple reason: he built everything himself. By 2026, the
Share
Coinstats2026/01/30 23:07