The GENIUS Act represents something harder and harder to find in Washington: true bipartisan consensus on complex fiscal policy. After months of negotiations and compromise, Congress delivered a stablecoin framework designed to protect consumers, support innovation and strengthen the dollar’s global leadership. Now, just as regulators begin the hard work of implementation, some in the Big Bank lobby want to reopen settled issues by using ongoing market structure legislation to insert amendments to the GENIUS Act. That 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: defining reserve composition standards, establishing audit 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 have only just begun this process—a process that will take time, public engagement and careful consideration, and stretch well into 2026. Nothing prohibits the big banks from engaging through the rulemaking process like everyone else.
The Big Bank lobby is pushing Congress to short-circuit this process by legally prohibiting third parties from offering returns or rewards to keep users’ coins stable. If successful, the banks would effectively kill the competitiveness of the stablecoin industry.
The core argument – that increased use of stablecoins will trigger deposit flight or create systemic risk – does not stand up to scrutiny. Stablecoins regulated under the GENIUS Act are fully backed by reserves of cash and short-term government bonds. Stablecoins do not engage in maturity transformation, extend credit or rely on leverage. In fact, the assets that underpin regulated stablecoins are among the safest in the financial system – the same assets that banks themselves turn to in times of stress.
Stablecoin reward programs are also not significantly different from other incentives used to encourage consumers to use a particular platform. Consumers have long received rewards from third-party financial platforms — from brokerage accounts to cash management to payment apps — for using their services. 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 to book flights with a specific airline. The GENIUS Act ensures that stablecoin rewards cannot be provided by the issuer or 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 the banks are not willing to offer their own pro-consumer programs, it is only natural that consumers seek out alternative services. When provided with the right incentive, consumers already move money freely between banks, MMFs, brokerage accounts and payment apps. This mobility is not a bug – it is a hallmark of a competitive financial system. Furthermore, claims of deposit flight deserve particular scepticism. There is no evidence that greater use of stablecoins will displace insured bank deposits on a large scale. When consumers use stablecoins, they do so primarily for payments, settlement and cross-border transactions – areas where traditional systems remain slow and expensive.
Congress took all of this into careful consideration when they wrote the GENIUS Act. They deliberately prohibited issuers from offering returns, but retained the ability for third parties to offer rewards. House Financial Services Chairman French Hill has acknowledged that issues around packaging, distribution and third-party programs are best addressed through the regulatory process now underway at Treasury.
That is precisely the point. Congress has already made the policy decision to authorize regulators to work through these issues during rulemaking.
There is also a broader risk that if bipartisan agreements like the GENIUS Act can be immediately reopened when an established industry does not like their competitive consequences, a legislative compromise becomes impossible. Resuming stablecoin policy while market structure negotiations and GENIUS implementation are underway threatens both efforts. It signals that carefully negotiated legislative agreements are tentative and invites defections from bipartite coalitions.
The responsible way forward is clear. The Treasury Department should be allowed to complete the implementation of the GENIUS Act, working through the complex technical issues Congress deliberately left to regulators. In the meantime, Congress should remain focused on market structure legislation without pressure to include language revisiting settled issues.
After implementation produces data on stablecoin usage and regulators gain experience with digital assets, Congress can assess whether targeted changes are warranted. This sequencing respects both the legislative process that produced the GENIUS Act and the regulatory process required to make it work.
Congress passed the GENIUS Act with strong bipartisan support rarely seen in Washington. This vote reflected thoughtful negotiations that considered relevant risks and put consumers above all else. To honor this work, implementation must come before change. This is how Congress maintains bipartisan confidence and how it ensures crypto market structure legislation succeeds.
