GENIUS Act Ignites Fierce Battle Between Banks and Crypto Exchanges
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The GENIUS Act of 2025 established a vital stablecoin framework, sparking a fierce clash between traditional banks and crypto exchanges. Banks are trying to stop platforms from offering interest to holders through third-party structures, which Brian Armstrong calls a "redline" issue.
Key Market Details
- In 2025, spot Bitcoin ETFs accumulated a staggering $113 billion in net assets.
- $126,000: Bitcoin's price peak, rising from a November low of $68,000.
- 0.01%: Interest banks paid depositors while earning yields of over 4% on treasuries.
- Gold delivered an impressive annual gain of 60%, far outpacing Bitcoin's end-of-year performance.
Banks and crypto exchanges are in major disagreement over the Genius Act and stablecoin rules. This conflict is causing significant changes:
- Banks oppose interest on stablecoin deposits, targeting crypto platforms like Coinbase and Kraken.
- Regulatory efforts by banks may create uncertainty, jeopardizing existing blockchain legal frameworks.
- Traditional banks view stablecoin yield-sharing as a threat to the stability of their community banks.
- Political tensions are rising on Capitol Hill amid the midterm elections, influenced by lobbying from the crypto and banking sectors.
- The outcome may favor the crypto industry, urging banks to adapt rather than resist.
The Path Ahead
Industry leaders call for clear regulations to confidently channel their investments. Despite "sticky" inflation and global tensions, the crypto sector expects to maintain legislative favor through 2026.