🚨 125 companies press Congress not to undermine GENIUS Act rules 🚨
A coalition of 125 crypto firms, fintechs and trade groups has sent an open letter to Senate Banking and Agriculture Committee leaders, warning that “poison pill” amendments to the GENIUS Act could derail the U.S. stablecoin bill and cede market share to overseas issuers. The letter, dated 21 Dec 2024, urges lawmakers to preserve the bill’s original prohibition on yield-bearing stablecoins, strict 100 % reserve requirements and state regulator opt-in provisions.
🔑Key points
🔹 Signatories: Coinbase, Ripple, Kraken, Paxos, Blockchain Association, Chamber of Digital Commerce and 120 regional custody banks; collective market cap >$450 bn.
🔹 Core demand: Keep §4(b) “No Yield Clause” intact—stablecoin issuers cannot pay interest or distribute profits to holders; protects money-market fund distinction.
🔹 Reserve rules: Insist on daily attestation (not monthly) and Treasuries-only backing; oppose watered-down language that would permit corporate bond holdings up to 15 %.
🔹 State vs federal: Support dual chartering—state money-transmitter licence or OCC special-purpose charter; oppose single federal pre-emption that would void New York’s BitLicense regime.
🔹 Enforcement teeth: Ask for civil penalties of $100k/day for reserve shortfalls and criminal referral for fraud; reject SEC “backdoor oversight” via investment-contract analysis.
🔎Why it matters
🔹 Market structure: GENIUS Act is the only stablecoin bill with bipartisan buy-in; changes now could fragment coalition and delay floor vote until after April recess.
🔹 Competitive moat: Signatories argue strict rules differentiate U.S. stablecoins from “shadow-banking” products abroad, building trust for institutional adoption.
🔹 SEC vs CFTC turf war: Language preserving CFTC primary oversight keeps most tokens outside SEC jurisdiction; any amendment re-opening “investment contract” door re-ignites Hill battles.
🔹 Banking lobby split: ABA wants OCC pre-emption to create national standard; community banks prefer state opt-in to avoid compliance race-to-bottom with coastal fintechs.
🚨Watch-outs
🔹 Senate calendar: Banking markup set for 20 Jan; failure to lock text before 30 Jan risks government-shutdown freeze.
🔹 White House pressure: Trump’s crypto czar David Sacks is pushing for “pro-innovation” carve-outs, potentially clashing with signatories’ conservative reserve stance.
🔹 Fraud optics: Recent stablecoin scam in Florida ($38 m loss) has made some Democrats wary of loosening rules; could flip votes needed for cloture.
🔹 State backlash: New York DFS superintendent already threatened legal challenge if federal bill pre-empts BitLicense, creating post-passage litigation risk.
🎯Bottom line:
The 125-company coalition is drawing a red line around the GENIUS Act’s guardrails, betting that strict—but clear—rules will accelerate institutional adoption faster than watered-down compromise. If Senate leaders heed the letter, the bill could reach Trump’s desk by March; if amendments dilute core provisions, the fragile bipartisan alliance may collapse, leaving stablecoin issuers in the same regulatory limbo that has persisted since 2019.
https://blockzeit.com/125-companies-press-congress-not-to-undermine-genius-act-rules/