Major US banking lobbies, including the American Bankers Association and the Bank Policy Institute, spent the August congressional recess actively lobbying for changes to the newly proposed stablecoin legislation, known as the Genius Act.

The primary concern is that the bill, in its current form, could lead to significant deposit flight from traditional banks to stablecoin issuers. Banks argue that if stablecoin providers can offer interest or yield, it could attract billions of dollars away from bank deposits, thereby increasing the cost of lending and restricting credit availability for businesses and households.

In response, crypto advocacy groups like the Crypto Council for Innovation and the Blockchain Association have mobilized to counter this push. They argue that the banks' proposed amendments would stifle innovation, protect incumbent institutions from competition, and create an uneven playing field. With lawmakers returning to a crowded legislative schedule, the feasibility of enacting any changes remains uncertain, but the conflict highlights a critical juncture in defining the regulatory landscape for digital currencies in the US.