The U.S. Department of the Treasury is receiving sharply divided feedback from crypto firms and traditional banking groups on how to implement the GENIUS Act — the new law governing stablecoin payments in the United States.
In a letter sent Tuesday, Coinbase urged the Treasury to restrict the ban on stablecoin interest payments solely to stablecoin issuers, allowing non-issuers such as crypto exchanges to offer yield products. The exchange argued that its proposal reflects Congress’s original intent when passing the legislation.
Meanwhile, a coalition of banking groups led by the Bank Policy Institute (BPI) has pushed for a broader interpretation, calling on the Treasury to apply the prohibition to all entities — issuers and non-issuers alike — effectively creating a blanket ban on stablecoin interest offerings.
These opposing recommendations were submitted in response to the Treasury’s advance notice of proposed rulemaking (ANPRM), the second round of public feedback on the GENIUS Act’s implementation, which closed on Tuesday.
In a joint statement released Wednesday, BPI and other banking associations reiterated their stance, urging the Treasury to ensure the prohibition extends to all digital asset service providers, including exchanges and affiliated partners.
“The GENIUS Act’s ban on the payment of interest or yield on payment stablecoins should apply universally — whether paid directly by an issuer or indirectly through affiliates or partners,” BPI said in a separate statement on Tuesday.
The same banking coalition voiced similar objections back in August, warning that allowing stablecoin interest payments could lead to as much as $6.6 trillion in deposit outflows from the traditional banking system.
“Treasury has no authority to second-guess Congress’s work”
Coinbase, meanwhile, argued that the Treasury must adhere strictly to Congress’s intent when implementing the GENIUS Act — which, it said, preserves the ability of non-issuers to offer interest on stablecoin holdings.
“Congress went no further,” Coinbase stated. “It deliberately chose not to include non-issuer third parties in the prohibition, recognizing that a broad ban on stablecoin-related payments would stifle growth and innovation — directly undermining the GENIUS Act’s central goals.”
The exchange concluded by emphasizing that the Treasury’s role is to implement, not reinterpret, the limits set by lawmakers.
“Treasury has no authority to second-guess Congress’s work.”
Alongside its support for allowing stablecoin yields, Coinbase also urged the Treasury to exclude non-financial software developers, blockchain validators, and open-source protocols from the GENIUS Act’s scope. The exchange further recommended that payment stablecoins be classified as cash equivalents for both tax and accounting purposes.
Enacted in July, the GENIUS Act is set to take effect either 18 months after its passage or 120 days following the release of final implementing regulations by federal agencies — a timeline that places its likely implementation in late 2026 or early 2027.
