The Genius Act Opens a Stablecoin Showdown

The newly passed GENIUS Act has drawn a clear line under stablecoin regulation, requiring issuers to back their coins entirely with cash or short-term U.S. Treasuries while banning interest payments. But a crafty loophole still allows exchanges to offer “rewards” on holdings—functioning much like interest. Banks are up in arms, warning this could destabilize deposits and lending infrastructure. Now, regulators and banks alike are eyeing new legislation—the CLARITY Act—to close the gap.