Ahead of the possible passage of the crypto market structure law known as the CLARITY Act, Faryar Shirzad, Chief Policy Officer at Coinbase, sheds light on the ongoing discussions surrounding key provisions of the already passed GENIUS Act.
GENIUS action under fire
Shirzad noted that the stablecoin rewards provisions of the GENIUS Act are currently a central topic of discussion among lawmakers. Shiraz noted that “reopening it now only creates uncertainty and jeopardizes the future of the US dollar as trading continues.”
Shirzad emphasized the importance of protecting the GENIUS Act, arguing that rewards benefit consumers without negatively impacting community banks.
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He claimed that the motivation behind the banks’ opposition is against it stablecoin rewards is clear. He claimed that US banks currently generate approximately $176 billion annually from the $3 trillion they hold at the Federal Reserve (Fed) and another $187 billion from card scanning fees, which amounts to almost $1,440 per household.
This results in more than $360 billion per year in payments and deposits, in addition to significant unused lending capacity, as the Federal Reserve encourages banks to hold reserves rather than deploy them.
According to Shirzad, stablecoin rewards pose a challenge to these financial margins – not by hindering banks’ ability to make loans, but by introducing real competition to the market. payment systems.
Shirzad further expressed concern about the way China has recognized the opportunities presented by the banking lobby during these Senate talks.
The country recently announced interest payments to users of its digital yuan, aiming to undermine the supremacy of the US dollar. He warned that banning rewards in the Senate would inadvertently support China’s efforts to challenge the dollar’s dominance.
Concluding his remarks, Shirzad asserted that banks’ opposition to stablecoin rewards is not based on prudential concerns, but stems from a desire to protect lucrative revenue streams threatened by competition.
Deaton criticizes ABA’s threat to Stablecoin rewards
John E. Deaton – attorney for XRP holders in the U.S. Securities and Exchange Commission (SEC) lawsuit against Ripple Labs and a former Senate candidate – also responded to these developments. He stressed the importance of the situation as China officially started offering interest on the digital yuan.
He marked that the American Bankers Association (ABA) is pressuring the Senate to close a “third-party loophole” in the GENIUS Act, which would limit companies like Coinbase (COIN) and Kraken from offering rewards to consumers.
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Deaton argued that banning U.S. companies from offering returns to ordinary citizens does not protect banks as claimed by the ABA; rather, there is a risk of forcing global dependence on the Chinese currency over the US dollar.
He emphasized that big banks are threatened by the concept of digital dollars because they cannot ‘rent’ that money to consumers if individuals earn revenue themselves.
The criticism also extended to bank officials, with Deaton claiming that the Banking Policy Institute, led by figures like Jamie Dimon, drafted an anti-crypto bill last year that undermines the interests of average Americans.
He claimed that if the Senate capitulates to the banking lobby, it will essentially impose a hidden tax on retail investors and customers across the country to safeguard Wall Street’s profits.
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