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U.S. Senators Get 250K Letters Calling for Protection of Stablecoin Yields

  • Advocacy group Stand With Crypto initiated a letter-writing campaign to U.S. senators to counter the message from bank lobbyists that stablecoin yields need to be shut down.
  • The letter asks the lawmakers to preserve the language of the GENIUS Act that became the first significant U.S. crypto law earlier this year.

In answer to Wall Street bank lobbying, crypto group Stand With Crypto said it enlisted its online members to send a message more than 250,000 times to the U.S. senators in their states, pushing back on the bankers' attempt to stymie the avenue for stablecoin rewards in the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.

The letter crafted by Stand With Crypto — a U.S. pro-crypto member organization initially established by Coinbase — urges lawmakers to ignore the banking advocates who launched an August effort to rewrite the law to completely shutter stablecoin issuers' ability to offer yields to users.

"Lawmakers chose to protect rewards because you know they are for consumers," according to the form letter set up to be automatically sent to politicians in each member's state if the member chooses to execute it. "A ban on rewards would stop consumers from earning value on fully backed digital dollars, even as banks lobbied to protect their credit card rewards as recently as last year."

The GENIUS Act, which became law earlier this year and is already in the midst of adoption by federal regulators, blocks stablecoin issuers from offering interest or yield directly, but it doesn't stop the issuers' affiliates or exchanges from doing so. As a result, the bankers have argued there could be a massive loss of deposits and money-market fund activity as this rivalry from stablecoins emerges.

"Congress must protect the flow of credit to American businesses and families and the stability of the most important financial market by closing the stablecoin payment of interest loophole," groups including the American Bankers Association, Bank Policy Institute, Financial Services Forum and others argued in their own campaign.

Crypto lobbyists had quickly responded to the bankers, seeking to protect the GENIUS Act — the first major crypto law approved in the U.S.

While the U.S. Treasury Department and other financial regulators have said they've begun trying to implement the stablecoin law, their workers who would be crafting those regulations are largely derailed from that effort at the moment. The U.S. government is mostly closed because of a budgetary shutdown as Congress let the federal spending plan lapse and hasn't yet agreed on a way forward.

Stand With Crypto reports more than 2.7 million crypto fans have signed up with the organization.

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