Blockchain Association Defends GENIUS Act as Banks Fear Stablecoin Power Shift

Backed by bipartisan law and clear oversight, the GENIUS Act is fueling stablecoin innovation, safeguarding consumers, attracting investment, and reinforcing U.S. leadership in the global financial race.

GENIUS Act Defended as Catalyst for Stablecoin Innovation and US Financial Leadership

The debate over stablecoin regulation has intensified as U.S. banks and digital asset companies clash over the recently enacted GENIUS Act. The Blockchain Association announced on Sept. 29 that it is committed to defending the law, describing it as a landmark in financial policy that brings clarity to digital asset markets and strengthens the country’s position in global innovation.

In a letter sent to Senate Banking Committee Chairman Tim Scott, Ranking Member Elizabeth Warren, House Financial Services Committee Chairman French Hill, and Ranking Member Maxine Waters, the Association wrote:

We write to express our strong and continuing support for the GENIUS Act — and to underscore why this bipartisan achievement must remain the foundation for U.S. digital-asset policy.

The group highlighted the law as the first comprehensive digital asset legislation signed into effect, requiring strict one-to-one reserves, transparency, and federal oversight. According to the Association, this framework ensures both consumer protection and regulatory certainty for entrepreneurs, encouraging them to build within the United States rather than abroad.

The letter also rejected arguments from major banks, which have warned that stablecoins could drain deposits, restrict lending, and reduce interest returns for customers. The Association countered that such claims are misleading, pointing to the $18 trillion held in U.S. bank deposits compared with just $277 billion in global stablecoins. A recent study cited by the group further found no link between stablecoin adoption and community bank deposit outflows.

Emphasizing the importance of stability, the Association stated:

The choice is clear. GENIUS is settled law. It is working. And it must be defended.

While traditional banks portray stablecoins as a potential risk, digital asset advocates argue they represent progress toward faster payments, lower costs, and wider credit access. The Association concluded that reversing GENIUS would undermine investment and innovation, warning that the U.S. must embrace this regulatory clarity to stay competitive in global finance.