U.S. banking groups are advocating for changes to the GENIUS Act regarding stablecoins. This move may have significant implications for market stability and consumer protection.
Banking Groups Urge Amendments to GENIUS Act
The GENIUS Act, enacted in July 2025, regulates stablecoins, but banking groups, including Citigroup and the Bank Policy Institute, are calling for amendments. They argue the current law contains regulatory loopholes that could adversely affect market stability and customer protection.
Unresolved Loopholes Threaten Deposit Outflows
According to the Bank Policy Institute, unresolved loopholes could lead to $6.6 trillion in deposit outflows. This poses a risk to both traditional banking and emerging crypto markets.
Regulatory Shifts and Their Market Impact
Past regulatory shifts, such as those affecting Tether and Circle, demonstrate how market confidence can be impacted. Analysts suggest that closing these loopholes could help prevent adverse outcomes similar to past stablecoin instabilities.
The push by banking groups for changes to the GENIUS Act highlights the need for a more transparent and reliable regulatory environment for stablecoins, which may significantly influence the financial sector.
