Criticism Spreads Over GENIUS Act's Stablecoin Interest Ban..."Only Favors Traditional Finance"

There have been claims that the GENIUS Act, a stablecoin (cryptocurrency linked to fiat currency) regulatory bill passed in the United States, is creating a favorable environment for traditional finance and could reduce the appeal of the digital dollar.

On the 4th (local time), Cointelegraph, a media outlet specializing in cryptocurrency, reported that industry backlash is mounting against the 'stablecoin interest ban provision' included in the GENIUS Act.

Previously, on the 18th, the GENIUS Act was enacted by the final signature of President Donald Trump. This bill prohibits stablecoin issuers from paying interest to holders.

Industry insiders have pointed out that this provision creates a favorable environment for the tokenization of traditional financial products such as Wall Street's Money Market Funds (MMFs).

Temujin Louie, CEO of Wanchain, said, "The inherent competitiveness of stablecoins will be weakened, while conversely, MMFs can gain speed and flexibility through tokenization."

Paul Brody, EY Global Blockchain Leader, also explained, "MMFs are assets that can be used like stablecoins. At the same time, since they can pay interest, they may enjoy advantages over stablecoins."

There are also suspicions that lobbying by traditional finance, particularly the banking sector, has influenced the interest ban provision. Austin Campbell, a blockchain professor at New York University, stated, "Banks have been actively lobbying Congress out of concern that interest-paying stablecoins could threaten their existing deposit business model."