Major U.S. banking institutions are pushing for amendments to the pro-cryptocurrency legislation signed into law by Donald Trump. The American Bankers Association (ABA), alongside 52 other banking organizations, has raised concerns about the GENIUS Act, which is intended to establish a regulatory framework for stablecoins and digital assets. The banks argue that the current law contains loopholes that could undermine the financial system by allowing stablecoins to be used in ways that blur the lines between payment tools and credit mechanisms [1].

The ABA and its partners have highlighted specific issues, such as the current prohibition against stablecoin issuers paying interest. According to the letter sent to the Senate Banking Committee, this restriction can be easily circumvented by exchanges, brokers, and their affiliates, who could offer interest-like returns. This, the banks warn, would transform stablecoins from short-term payment instruments into long-term stores of value and credit facilitators, potentially diverting deposits away from traditional banks [2].

The banks also expressed concerns about the risk of large-scale deposit outflows, particularly during periods of financial stress. Such a shift, they argue, could reduce the availability of credit, raise interest rates, and increase borrowing costs for businesses and consumers. This would disproportionately impact traditional financial institutions, which they believe are being sidelined in favor of newer, crypto-focused competitors [3].

This regulatory effort comes amid a growing trend of pro-cryptocurrency advocacy within Trump-aligned circles. Following the events of January 6, 2021, major U.S. banks reportedly restricted or closed accounts belonging to the Trump family, prompting them to turn to cryptocurrencies as an alternative. The Trump family has since become vocal supporters of crypto, and their influence has contributed to the broader pro-cryptocurrency agenda under the Trump administration [4].

Under this favorable regulatory environment, U.S. cryptocurrency firms have seen significant growth. For example, Bullish, a digital exchange backed by figures like PayPal co-founder Peter Thiel, raised over $1.1 billion through an oversubscribed IPO, pricing at $37 per share on the New York Stock Exchange. This indicates a strong market appetite for crypto-related ventures in a regulatory climate that increasingly supports digital finance [5].

At the same time, Trump-backed cryptocurrency mining operations are expanding internationally, with reports indicating that a U.S. mining group supported by Donald Trump Jr. and Eric Trump is exploring partnerships in Asia to grow its Bitcoin holdings. This reflects a broader strategy to leverage the current favorable conditions for global expansion [6].

The ABA’s efforts to revise the GENIUS Act aim to address these concerns and ensure that traditional banks remain competitive in the evolving financial landscape. The changes could influence how banks engage with digital assets and shape the next phase of U.S. cryptocurrency regulation. The outcome of these discussions will have far-reaching consequences for both the banking sector and the broader cryptocurrency market [1].

Source:

[1] Banks Join Forces in the US: They Are Trying to Change the Bullish Cryptocurrency Law Signed by Trump (https://en.bitcoinsistemi.com/banks-join-forces-in-the-us-they-are-trying-to-change-the-bullish-cryptocurrency-law-signed-by-trump/)

[2] Banks Join Forces in the US: They Are Trying to Change the Bullish Cryptocurrency Law Signed by Trump (https://coinmarketcap.com/community/articles/689ec6f9657247299ed7301/)

[4] Don Jr says his family got into crypto after banks refused to do … (https://finance.yahoo.com/news/don-jr-says-family-got-134119065.html)

[5] Bullish IPO raises $1.1B in oversubscribed debut at $5.4B … (https://m.economictimes.com/news/international/us/bullish-ipo-raises-1-1b-in-oversubscribed-debut-at-5-4b-valuation-as-peter-thiel-backed-exchange-rides-crypto-market-boom/amp_articleshow/123283072.cms)

[6] Crypto group backed by Trump sons hunts for bitcoin … (https://www.ft.com/content/61abe931-390c-499a-951f-d0e95672fb0b)