Stablecoin Loophole: Urgent Warning from Bank Policy Institute on GENIUS Act Fix
Main Idea
The Bank Policy Institute (BPI) warns that a loophole in the GENIUS Act could allow stablecoin issuers to pay interest, potentially destabilizing the financial system by diverting trillions from traditional bank deposits.
Key Points
1. The GENIUS Act's current wording may permit stablecoin issuers to pay interest through various channels, posing a structural risk to financial stability.
2. BPI represents major U.S. banks and argues this loophole could divert up to $6.6 trillion from traditional bank deposits, harming economic funding.
3. The GENIUS Act aims to regulate non-traditional investments but may fail to address systemic risks if not revised to close this loophole.
4. Banking groups assert payment stablecoins should not pay interest, as they are meant for transactions, not competing with regulated deposits or money market funds.
5. BPI urges lawmakers to revise the GENIUS Act to protect financial stability and ensure equitable economic growth.
Description
BitcoinWorld Stablecoin Loophole: Urgent Warning from Bank Policy Institute on GENIUS Act Fix The financial world is buzzing with a critical concern raised by major banking groups: a significant stablecoin loophole in proposed legislation. The Bank Policy Institute (BPI), a leading voice for the U.S. banking sector, along with several other influential banking organizations, is urgently calling on Congress to address this issue. They warn that if left unaddressed, this particular loophole within...
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