Last year President Trump signed the GENIUS Act, a bill to regulate payment stablecoins and protect consumers. The new law makes it clear that stablecoin issuers cannot offer interest on their digital dollars. This clear prohibition was added to protect Americans from confusing uninsured stablecoin wallets with insured bank deposits and to ensure that the law did not create incentives that would undermine bank lending to small businesses and communities.
However, a loophole that allows other crypto companies to pay interest or other financial rewards on stablecoins undermines this prohibition and puts everyday consumers at risk. A Treasury Department report estimates this special interest loophole could drain deposits from community banks, which limits their ability to fund loans for households and small businesses. The Senate is now considering the Clarity Act, a broader digital asset market structure bill that gives Congress a chance to fix this problem before it grows.
Your lawmakers have an opportunity to protect consumers, preserve local lending, and support responsible financial innovation. Payment stablecoins should be used as a payment tool, not as a deposit-like product that pays interest-like rewards and pulls funds away from local banks.
Ask your Senators to strengthen the Clarity Act by closing the stablecoin interest loophole and protecting lending in local communities.