Crypto Market Suggestions: How Lobbying Intervenes in the Stablecoin Structure

Amid deep negotiations on Capitol Hill, a major proposed law regarding the crypto market is becoming a battleground for intense competition between two powerful industries. This is not just a simple debate about technology or regulation — it is a fundamental contest over how the core rules of the digital asset market should be structured.

The banking sector has stated that rewards for stablecoins pose a significant threat to the country’s deposit system. The crypto industry, in response, argues that banks are beginning to act without cause to enslave and are not seeing true innovation. In the midst of this conflict, a wave of pressure from large institutions has driven significant changes to the expected legislation.

The Real Issue: Who Truly Cuts for Consumers?

The perceived opportunity for the first vote to happen is growing this week, but the real challenge does not come from the remaining senators. It comes from Wall Street lobbyists arriving at business dinners. Summer Mersinger, president of the Blockchain Association, said, “The real difference lies in the relentless campaign by major big banks to rewrite the entire bill to protect their own power.”

Bankers warn that crypto transactions could lead to delays in local lending worth millions of dollars. The American Bankers Association and other groups are actively speaking out against offerings from platforms like Coinbase. They say that the “rewards” are actually interest — a direct competition to their traditional deposit services.

Coinbase responded through Kara Calvert, Vice President of US Policy: “Stablecoins are not true deposits like those offered by banks. Deposits are guaranteed by the Federal Deposit Insurance Corporation, and banks use money to earn profits. We only hold our clients’ assets — that makes a big difference.”

Compromise in the GENIUS Act: What the Crypto Sector Received

Last year, the GENIUS Act laid out a clear proposal: issuers of stablecoins cannot give direct interest to holders. However, third-party platforms can offer rewards. It is a careful balance designed to foster innovation while protecting traditional banking.

Now, the new draft legislation introduces a peculiar compromise. Stablecoins can provide rewards if they are “static” only, similar to a regular savings account. But if the rewards come from active transactions and client activities, they are still permitted.

Corey Frayer, a former crypto adviser at the Securities and Exchange Commission, said, “These bans have little practical impact. Platforms earn rewards through staking, lending, and other activities that are clearly outside the scope of these laws.”

Challenges to Passage: No Guarantees This Week

The new draft released late last week still contains many elements the crypto market is looking for, but the reduction of support for stablecoin yield is evident. The Senate Banking Committee plans to consider it this week, but it is not certain it will pass.

Problems do not end with one committee. The Senate Agriculture Committee also needs to propose its own version of the bill. The two committees will combine their drafts before the full Senate can vote.

In December, the combined industry sent a letter to key senators requesting that the GENIUS Act not be revisited. They said that changes would “destroy a carefully negotiated compromise, reduce consumer choice, and create confusion in the market.”

Coinbase CEO Brian Armstrong warned last month that his company would not support any legislation that caves to bankers. The company reported $355 million in stablecoin-related revenue in just the third quarter.

The Path Forward: Where Is the Market Heading?

As lobbyists continue to negotiate details, consumers and platforms are speaking about what the real proposal might be that benefits the industry. Mersinger said that if banks succeed in overturning this law, “it will be a matter of who truly fights for the customers and who fights to maintain the old power structure.”

The outcome remains uncertain, and many weeks may be needed before any final decision is reached. But one thing is clear: the real battle is not about technology — it is about who has the power to shape the future of the crypto market.