BPI Argues That GENIUS Act Stablecoin Yield Loopholes Jeopardize the Banking Sector
Main Idea
The Bank Policy Institute (BPI) argues that loopholes in the GENIUS Act allow stablecoin companies to evade regulatory guardrails, potentially undermining the U.S. banking system by enabling indirect yield payments.
Key Points
1. The BPI, representing major U.S. banks, warns that the GENIUS Act's guardrails can be circumvented by stablecoin companies to pay interest indirectly.
2. Stablecoin providers like PayPal (PYUSD) and Coinbase (USDC) exploit these loopholes, acting as Bank-as-a-Service (BaaS) platforms to distribute yields.
3. Critics highlight that such practices attract capital flows away from traditional banking, impacting the U.S. credit system.
4. The BPI emphasizes that stablecoin companies are not supervised or examined like banks, creating regulatory disparities.
Description
The BPI explains that as crypto companies circumvent the GENIUS Act guardrails, the difference in yield between ordinary banking products and stablecoins could lead to deposits migrating to the latter, putting the credit creation system at risk of failure and potentially spreading throughout the U.S. economy. Bank Policy Institute Calls for Plugging Genius Act Stablecoin
Latest News
- Tron DAO, Justin Sun Accuse Bloomberg of False Asset Reporting2025-08-15 12:36:42
- Bullish’s Dazzling Debut Bolsters Red-Hot Year for Crypto-Linked IPOs2025-08-15 11:32:51
- BTCC Teams Up With NBA All-Star Jaren Jackson Jr. in First-Ever Sports Sponsorship2025-08-15 11:04:26
- Top 10 Crypto Exchanges in August 2025 – Ranked by Volume, Fees & Features2025-08-15 10:17:22
- BPI Argues That GENIUS Act Stablecoin Yield Loopholes Jeopardize the Banking Sector2025-08-15 09:37:31