125 cryptocurrency companies join forces to pressure the U.S. Congress! Opposing banks' restrictions on stablecoin rewards.

125 cryptocurrency companies jointly opposed the restriction of stablecoin rewards, emphasizing their non-interest nature, criticizing bank protectionism, and urging Congress to maintain the original provisions of the GENIUS Act.

125 cryptocurrency organizations sent a letter to the Senate, advocating for the stablecoin rewards program.

The Blockchain Association, a lobbying organization for the U.S. encryption industry, spearheaded a large-scale initiative last Thursday (12/18), uniting over 125 cryptocurrency companies, industry organizations, and fintech firms to jointly send a letter to the U.S. Senate Banking Committee.

This letter is jointly signed by industry giants including Gemini, Coinbase, and Kraken, aimed at urging Congress to maintain the current regulations on the stablecoin rewards program in the GENIUS Act and firmly oppose the tightening restrictions proposed by the banking industry. The core of this dispute lies in the traditional banking industry actively pressuring for an expansion of the definition of “revenue” in the Act, thereby restricting encryption platforms from offering various rewards to coin holders.

Source: Blockchain Association The Blockchain Association, a lobbying organization for the U.S. cryptocurrency industry, unites over 125 cryptocurrency companies, industry organizations, and fintech firms to jointly send a letter to the U.S. Senate Banking Committee.

Tyler Winklevoss, co-founder of Gemini, strongly criticized this, accusing the banking industry of excessive “power expansion” in an attempt to overturn a legislative agreement that has long been reached. The industry alliance believes that the “GENIUS Act”, signed by President Trump in July 2025, has established a clear regulatory framework, with its core being the explicit separation of stablecoin issuers and intermediary platforms (such as exchanges).

Source: X/@tyler Tyler Winklevoss, co-founder of Gemini, launched a strong attack on this, accusing the banking industry of excessive “abuse of power.”

According to current laws, stablecoin issuers are prohibited from directly paying interest, but third-party platforms and service providers are allowed to offer legal rewards or incentives to users. This design intention is to ensure the stability of the financial system while retaining market competitiveness and innovation space.

Stablecoin rewards are not interest, crypto operators criticize the banking industry for protectionism.

The crypto industry alliance emphasized in the letter that the stablecoin rewards program is fundamentally different from the deposit interest of bank payments. These rewards are compared to the “cashback” or “points rewards” of credit card companies, rather than traditional savings returns.

Banking industry groups (such as the American Bankers Association ABA) are currently lobbying the Treasury Department for a broad interpretation of “interest or earnings,” arguing that any economic benefits, including merchant discounts and platform loyalty programs, should be included in the prohibition.

However, the Blockchain Association refuted, pointing out that banks offer generous rewards programs when promoting credit cards and payment services without restrictions, so the limitation on expansion to encryption platforms is clearly “protectionism.”

Extended Reading The Genius Bill prohibits stablecoin issuers from paying Interest! Two platforms exploit loopholes: we change to offer “rewards”

The letter further pointed out that the stablecoin rewards program has substantial economic benefits for consumers. Currently, the average yield on checking accounts at traditional banks in the United States is only about 0.07%, and savings accounts are also only about 0.40%, far below the rate of inflation. In contrast, the stablecoin rewards program allows users to earn a more competitive rate of return in the digital asset environment, helping households offset the impact of inflation, especially in a higher interest rate market environment.

Lindsay Fraser, Policy Director of the Blockchain Association, stated that revoking legitimate stablecoin rewards would directly harm consumers' wallets, reduce market choices, and suppress competition in emerging payment technologies.

Refuting the threat of 6.6 trillion deposit outflows, economic analysis indicates that banks are well-capitalized.

In response to the “deposit outflow threat theory” proposed by banking industry groups, the encryption alliance has presented strong economic data to counter it. The organization led by the Bank Policy Institute (BPI) has cited reports warning that if the “indirect interest loophole” of stablecoins is not plugged, it could lead to up to $6.6 trillion in bank deposits shifting to the crypto market, thereby impacting credit supply and financial stability. However, the Blockchain Association quoted an analysis by Charles River Associates on the adoption of stablecoins from 2019 to 2025, which showed that no disproportionate outflow of deposits from community banks was observed.

In addition, the letter revealed a key fact: Currently, the reserve balance held by various banks in the United States at the Federal Reserve is as high as approximately 2.9 trillion dollars, and they are earning Interest from it, rather than putting it all into loans.

The alliance believes that this proves the lending capacity of banks has not been limited by a shortage of deposits. Therefore, the banking industry's hostility towards stablecoin rewards is more about protecting its existing revenue model from competitive challenges rather than genuine concerns about “safety and soundness.” If Congress were to restart the already settled legislative provisions at this time, it would create unnecessary legal uncertainty, undermining investors' and innovators' confidence in the predictability of the U.S. regulatory environment.

The global stablecoin market capitalization has surpassed 310 billion, and the rewards mechanism has become the key to competition.

The stablecoin market experienced explosive growth in 2025, with a total market value surpassing $310 billion, growing over 50% compared to last year. Although Tether ($USDT) and Circle ($USDC) still dominate, the rapid rise of emerging stablecoins such as $USDS and $RLUSD indicates a market desire for diversified payment tools.

In this highly competitive context, the “rewards mechanism” has become a key factor in whether emerging payment solutions can compete with traditional payment systems (such as ACH or SWIFT). The Blockchain Association points out that rewards can effectively accelerate technology adoption, reduce transaction costs, and improve settlement speed.

Currently, the Federal Deposit Insurance Corporation (FDIC) has also introduced new rules allowing traditional banks to issue stablecoins through subsidiaries. This means that the banking industry is also preparing to compete directly, and if legislative measures are used to castrate the competitive tools of non-bank industry players at this time, it will create an extremely unfair market environment.

Further Reading The first wave of rules for the “GENIUS Act” has been released, paving the way for banks to issue stablecoins under the FDIC.

The blockchain association concluded that maintaining the original terms of the “GENIUS Act” is a necessary measure to protect consumer rights and maintain the United States' leading position in digital finance. As the Senate Banking Committee prepares for the final review of the digital asset bill, the joint voice of these 125 businesses undoubtedly adds significant political pressure to this cross-industry regulatory game.