Banks in the United States are lobbying to change new stablecoin regulations under the GENIUS Act, fearing massive deposit outflows as crypto exchanges gain a competitive advantage in offering yield to customers.

The legislation, which passed in July, prohibits stablecoin issuers, which could include banks, from paying interest directly to customers. However, crypto exchanges that hold stablecoins, such as USDT and USDC, can offer yields and rewards on them.

Banks in the United States are lobbying to change new stablecoin regulations under the GENIUS Act, fearing massive deposit outflows as crypto exchanges gain a competitive advantage in offering yield to customers.

The legislation, which passed in July, prohibits stablecoin issuers, which could include banks, from paying interest directly to customers. However, crypto exchanges that hold stablecoins, such as USDT and USDC, can offer yields and rewards on them.