More than 125 crypto firms, investors and trade groups have urged U.S. lawmakers not to reopen a provision of proposed stablecoin legislation, warning that changes could reduce consumer choice and slow innovation. The GENIUS Act bars stablecoin issuers from paying interest or yield directly to token holders but allows platforms and intermediaries to offer lawful rewards or incentives. The Blockchain Association and signatories including Ripple, Coinbase, and Stripe sent a Dec. 18 letter to Senate Banking Committee Chair Tim Scott and Ranking Member Elizabeth Warren arguing that efforts to reinterpret the GENIUS Act would go beyond what Congress originally approved.
The letter argues that the distinction between issuer yields and platform rewards was intentional and the result of careful negotiation. They contend that there is no evidence these programs harm community banks, and there is no data showing stablecoins have caused bank deposit outflows. The signatories say incentives are common in competitive payments markets and warn that removing them could entrench existing financial players while limiting competition from newer payment technologies.
Several crypto and fintech firms signed the letter, including Coinbase, Injective, Algorand, Stripe, PayPal, Ripple, Kraken, Gemini and a16z Crypto, along with policy organizations and state-level crypto advocacy groups. Some signatories say stablecoin rewards are already permitted under existing law and help promote competition and innovation in digital payments. The letter cites the current interest rate environment, noting that traditional checking and savings accounts offer minimal returns and that stablecoin reward programs can pass value back to users amid rising living costs.
Tyler Winklevoss, co-founder of Gemini, said that some banking interests were pushing to block platforms from offering stablecoin rewards, warning that changing the rule would hurt innovation and U.S. competitiveness. The Blockchain Association said preserving the legislation as written is essential for consumer choice, competition and long-term regulatory clarity. Lawmakers have not publicly said whether they plan to revise the provision.
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