In July of 2025, President Trump signed the GENIUS Act, a bill to regulate stablecoins and protect consumers. The 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 the bank deposits that fund lending to small businesses and communities. However, crypto exchanges and affiliates are exploiting a loophole in the law and offering interest-like “rewards” for holding stablecoin in a clear attempt to evade Congressional intent. Unless there are efforts to limit these stablecoin incentives, a Treasury Department report estimates trillions in bank deposits could go away, threatening banks’ ability to fund loans for households and small businesses. A recent Morning Consult national survey conducted for ABA found that Americans want Congress to protect those bank deposits:

  • By a 3-to-1 margin, consumers say policymakers should bar stablecoin issuers and affiliates from offering interest and rewards if there’s a risk to lending and economic activity
  • By a 6-to-1 margin, Americans say Congress and the administration should be “cautious” in establishing new rules for crypto and stablecoin and they should not take any steps that could weaken community banks or the financial system.
  • 84% of consumers say companies offering bank-like services should follow the same consumer protection rules as banks.

Check out the full results on consumer views on rules surrounding digital assets here.

Your lawmakers have an opportunity to protect consumers and preserve lending by closing this loophole, fostering a safe and secure marketplace. Urge your lawmakers to extend restrictions on paying interest or yield on payment stablecoins to cover all market participants, thereby ensuring that payment stablecoins serve as a payment tool that supports financial innovation while minimizing unintended consequences for the banking system and broader economy.  

Ask your Senators to close the stablecoin loophole to protect lending in local communities.