The GENIUS Act Is Already Law. Banks Shouldn't Try to Rewrite It Now

Core Viewpoint - The bipartisan GENIUS Act aims to foster innovation in the financial sector through stablecoins, but legacy financial institutions are lobbying against it to protect their profits and limit consumer choice [1][3]. Group 1: Reaction of Legacy Financial Institutions - Major legacy financial institutions are expressing concerns about the GENIUS Act, fearing that it may lead to rapid growth in the stablecoin market [1]. - These institutions are attempting to influence Congress to amend the legislation to slow down the growth of stablecoins [1][3]. Group 2: The Importance of Competition - The response from legacy financial firms is seen as exaggerated and unnecessary; instead, they should embrace competition and innovate to meet consumer demands [2]. - The GENIUS Act was designed to enhance consumer protections and regulatory oversight, rather than to shield entrenched banking interests [3]. Group 3: Impact on Community Banks - Critics argue that stablecoins could cause significant deposit outflows from community banks, with estimates reaching $6.6 trillion; however, this concern is deemed unfounded by a July 2025 analysis [4]. - The analysis indicates no significant correlation between stablecoin adoption and deposit outflows from community banks, with most stablecoin reserves remaining within the traditional financial system [4]. Group 4: Stablecoins and Lending - Stablecoins are not detracting from lending; rather, their growth may enhance the U.S. money supply over time, benefiting consumers without jeopardizing credit availability [5]. Group 5: Regulatory Considerations - There are calls to repeal Section 16(d) of the GENIUS Act, which facilitates stablecoin business across state lines for state-chartered institutions; repealing this section could lead to a fragmented regulatory environment [6].