Crypto industry executives: Amending the GENIUS Act could constitute a "national security trap"

CoinVoice has learned that several senior executives in the crypto industry and advocacy organizations warn that amending the stablecoin regulatory framework “GENIUS Act” according to banking industry lobbying demands—specifically restricting the provision of yields to stablecoin holders through third parties—could weaken the United States’ competitiveness in the global financial system and even constitute a “national security trap.”

Crypto attorney John Deaton stated that banning stablecoin yield mechanisms might instead encourage the market to shift toward China’s interest-bearing digital renminbi, thereby undermining the dollar’s position. The crypto industry organization Blockchain Association pointed out that there is currently no evidence that the development of stablecoins would disrupt the traditional banking system; such amendments seem more like a competitive blockade by large banks following a bipartisan consensus.

Paradigm Vice President of Government Affairs Alexander Grieve also warned that overturning existing reward arrangements would waste legislative progress. Meanwhile, Galaxy Digital CEO Mike Novogratz bluntly stated that it would be a mistake for the U.S. to withdraw relevant regulations due to industry pressure.