The GENIUS Act represents something increasingly difficult to find in Washington: true bipartisan consensus on complex financial policy. After months of negotiations and compromise, Congress passed a stable framework designed to protect consumers, support innovation, and strengthen the dollar’s global leadership. Now, as regulators begin the hard work of implementation, some members of the big bank lobby want to reopen settled issues, using pending market structure legislation to make amendments to the GENIUS Act. This 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: setting reserve composition standards, establishing auditing and disclosure requirements, setting licensing and capital expectations, and tailoring anti-money laundering and sanctions regimes for stablecoin issuers. Each of these decisions will shape how stablecoins are issued in practice.
The agencies are just beginning this process – a process that will take time, public engagement, and careful review, and will continue through 2026. There is nothing stopping big banks from engaging in the rulemaking process like everyone else.
The big bank lobby is pushing Congress to short-circuit this process by statutorily prohibiting third parties from offering returns or rewards for users’ holding of stablecoins. If successful, banks would effectively kill the competitiveness of the stablecoin sector.
The main argument – that increased stablecoin adoption will trigger a flight of deposits or create systemic risk – does not stand up to scrutiny. Stablecoins regulated by the GENIUS Act are fully backed by reserves of cash and short-term Treasury bills. Stablecoins do not engage in maturity transformation, extend 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.
Stable 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 payment apps – for using their services. The incentives offered by an exchange or fintech platform for holding stablecoins are not significantly 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 stablecoin rewards cannot be provided by the issuer or by the asset itself; they may only be offered by third parties on a discretionary and entirely optional basis.
Stablecoin rewards programs put more money in the pockets of American consumers. If banks are unwilling to offer their own consumer-friendly programs, it is only natural that consumers will seek alternative services. When given the right incentives, consumers already move their funds freely between banks, money market funds, brokerage accounts and payment apps. This mobility is not a defect: it is the mark of a competitive financial system. Furthermore, allegations regarding the leaking of deposits deserve particular skepticism. There is no evidence that greater stablecoin adoption will displace insured bank deposits at scale. When consumers use stablecoins, they do so primarily for payments, settlements and cross-border transactions – areas where traditional systems remain slow and expensive.
Congress carefully considered all of this when it drafted the GENIUS Act. They intentionally prohibited issuers from offering returns, but preserved the ability for third parties to offer rewards. House Financial Services Chairman French Hill acknowledged that issues related to packaging, distribution and third-party programs would be best addressed through the regulatory process currently underway at Treasury.
That’s exactly the point. Congress has already made the policy decision to allow regulators to address these issues in rulemaking.
There is also a broader risk that if bipartisan agreements such as the GENIUS Act can be immediately reopened whenever an incumbent industry dislikes their competitive implications, legislative compromise will become impossible. Reviving stablecoin policy while negotiations over market structure and GENIUS implementation are underway threatens both efforts. This indicates that carefully negotiated legislative agreements are tentative and invites defection from bipartisan coalitions.
The responsible path forward is clear. Treasury should be authorized to complete implementation of the GENIUS Act, resolving the complex technical issues that Congress deliberately left to regulators. Meanwhile, Congress should remain focused on market structure legislation without pressure to include language revisiting settled issues.
Once implementation produces data on stablecoin usage and regulators gain experience with digital assets, Congress can evaluate whether targeted changes are warranted. This order respects both the legislative process that gave rise to the GENIUS Act and the regulatory process necessary for its operation.
Congress passed the GENIUS Act with strong bipartisan support rarely seen in Washington. This vote reflects thoughtful negotiations that took into account relevant risks and put consumers above all else. To honor this work, implementation must precede amendment. This is how Congress preserves bipartisan trust and ensures the success of crypto market structure legislation.
