Crypto vs Banks: 125 Firms Push Congress on Stablecoin Reward Rules
Over 125 cryptocurrency companies are banding together in a last-ditch effort to push back against increasing pressure...
Quick overview
- Over 125 cryptocurrency companies are uniting to oppose proposed limits on stablecoin rewards, arguing it could hinder competition and innovation.
- The coalition, led by the Blockchain Association, urges Congress to maintain the GENIUS Act, which clearly distinguishes between stablecoin issuers and intermediary platforms.
- Industry leaders claim that limiting rewards would reduce consumer choice and unfairly benefit large financial institutions.
- The letter highlights that stablecoin rewards provide significant benefits to users compared to traditional banking interest rates.
Over 125 cryptocurrency companies are banding together in a last-ditch effort to push back against increasing pressure from the US banking industry. They’re warning lawmakers that proposed limits on stablecoin rewards could have a seriously negative impact on competition and slow down financial innovation in the country. In a well-coordinated letter to Congress, the coalition argues that recent lobbying by traditional banks is essentially threatening a framework that lawmakers themselves had already agreed to.
At the heart of this dispute is the GENIUS Act – legislation designed to clarify how stablecoins actually work in the US financial system. The law draws a clear line between stablecoin issuers and intermediary platforms like exchanges and fintech apps – with each obviously playing a distinct role.
Why Crypto Firms Are Pushing Back
The coalition’s letter, coordinated by the Blockchain Association, urges Congress to leave the GENIUS Act alone without making any changes. Industry leaders say banks are trying to reopen a debate that lawmakers already closed.
Tyler Winklevoss, co-founder of Gemini, described the banking sector’s effort as an overstepping of authority. He points out that the law is designed so that issuers can’t pay interest, while platforms can offer rewards funded through their own business models.
The crypto industry is drawing a direct comparison with credit card rewards here, where banks can’t pay interest on deposits but still offer incentives to customers through their own programs.
The Blockchain Association wrote a letter to the US Senate Committee on Banking, signed by over 125 crypto industry groups and companies, opposing the ban on third-party service providers and platforms offering customer rewards to stablecoin holders. pic.twitter.com/0EFuaszGzJ
— TheCryptoBasic (@thecryptobasic) December 20, 2025
Some key points raised by the coalition include:
- Issuers have a strict no-interest policy under the current law
- Platforms are taking on the operational risks, not the deposit risks
- Rewards are funded from the platform’s own revenue sources, not from customer deposits
Stablecoin Rewards and Consumer Value
The coalition says stablecoin rewards deliver real benefits to everyday users. According to data from the Federal Deposit Insurance Corporation, the average US checking account earns around 0.07%, while savings accounts average a little over 0.40% annually.
But by contrast, crypto platforms are often offering returns that significantly outstrip those figures, which is what has drawn major industry players like Coinbase and Kraken into the coalition.
The letter also notes that large banks are now developing their own stablecoin products, and that regulatory pressure could be used to harm emerging competitors before they’ve even had a chance to establish themselves.
Banking Pressure and Market Competition
Banking groups are arguing that platform rewards look too much like issuer-paid interest and should be subject to the same limits. The crypto coalition is strongly opposed, warning that such restrictions would consolidate power in the hands of just a few large financial institutions.
According to the letter, limiting rewards would:
- Reduce consumer choice in digital payments.
- Give an unfair advantage to big financial institutions that already have a stranglehold on the market.
- Create uncertainty and confusion for innovators and investors.
The coalition is warning that revisiting settled legislation could slow progress on broader crypto-market reforms that both parties can agree on. For now, the debate is a reminder of a deeper struggle between traditional finance and the fast-evolving digital asset industry – with all sorts of implications for competition, innovation, and consumer returns.
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