The systemic integrity of the traditional financial infrastructure faces a critical juncture. US banking consortiums are actively pressing Congress to rectify a perceived regulatory arbitrage within the GENIUS Act. This legislative oversight allows stablecoin issuers to circumvent direct yield prohibitions through affiliated entities. The immediate consequence manifests as a potential $6.6 trillion in deposit outflows from conventional banking institutions.
This significant capital reallocation threatens to constrict credit availability, elevate interest rates, and increase borrowing costs across the economy. Such a structural shift necessitates a robust regulatory response to maintain financial equilibrium and ensure competitive parity between established banking services and nascent digital asset protocols. The market’s efficient functioning relies on clear, consistent parameters governing all financial instruments.
This regulatory challenge underscores a fundamental systemic tension between established financial mechanisms and the expanding digital asset ecosystem, demanding precise legislative alignment to preserve credit flow and market stability.
- Potential Deposit Outflows ▴ $6.6 trillion
- GENIUS Act Enactment Date ▴ July 18, 2025
- Projected Stablecoin Market Growth by 2028 ▴ $2 trillion
Signal Acquired from ▴ Cointelegraph
