Blockchain Association has issued a joint letter, signed by more than 125 trade associations, industry organizations, and companies, urging Congress not to broaden the GENIUS Act’s ban on interest or yield in ways that would restrict stablecoin rewards provided by platforms and third parties.
The GENIUS Act was created as a bipartisan compromise aimed at protecting consumers while encouraging competition and innovation in payments. The law prohibits stablecoin issuers from paying interest directly to consumers but allows platforms and intermediaries to offer rewards and incentives. According to Blockchain Association, proposals to expand the prohibition could limit competition in payments and financial services, reduce regulatory clarity, and reopen settled legislative matters.
“Congress struck a balance in GENIUS, preserving consumer choice while allowing new payment technologies to innovate,” said Blockchain Association CEO Summer Mersinger. “Efforts to restrict lawful rewards now would reduce market competition, entrench incumbent payment providers, and destabilize a framework that was just enacted.”
Stablecoin reward programs are described as similar to traditional incentive offerings from banks and card networks. These programs are seen as helping households access higher yields compared to low rates on standard bank accounts.
The association also disputes claims that stablecoin rewards harm community banks. It cites independent analysis indicating there is no evidence of significant deposit outflows due to stablecoin adoption. Additionally, it notes that banks currently hold large reserves at the Federal Reserve earning interest instead of lending those funds out.
The letter warns that revisiting the GENIUS Act so soon after its passage could undermine confidence in Congress’s ability to establish lasting financial regulations supportive of innovation. It may also weaken bipartisan support for future market structure legislation.
Blockchain Association represents leading investors, companies, and projects within the cryptocurrency sector who advocate for policies supporting innovation and competition in the crypto economy.
