Cryptocurrency Industry Executives: Amending the GENIUS Act Could Constitute a "National Security Trap"

Multiple executives in the cryptocurrency industry and advocacy organizations have warned that modifying the stablecoin regulatory framework under the banking lobby's demands in the GENIUS Act, which restricts providing yields to stablecoin holders through third parties, could undermine the United States' competitiveness in the global financial system and even pose a "national security trap."

Pro-crypto lawyer John Deaton stated that banning stablecoin yield mechanisms might instead drive the market towards China's interest-bearing digital yuan, thereby weakening the dollar's position. The cryptocurrency industry organization Blockchain Association pointed out that there is currently no evidence that the development of stablecoins would disrupt the traditional banking system, and such modifications seem more like competitive obstruction by large banks after achieving bipartisan consensus.

Alexander Grieve, Vice President of Government Affairs at Paradigm, also warned that overturning existing reward arrangements would waste the legislative progress made. Meanwhile, Mike Novogratz, CEO of Galaxy Digital, bluntly stated that it would be a wrong choice for the U.S. to roll back related rules due to industry pressure.