The post Stablecoin Rewards Become the New Battleground appeared on BitcoinEthereumNews.com.

Fintech A quiet policy battle is unfolding behind the scenes in Washington, and this time crypto companies are moving first. More than 125 firms have coordinated a response to what they see as an attempt by the banking industry to curtail one of stablecoins’ most attractive features: customer rewards. Key Takeaways More than 125 crypto companies are pushing back against banking efforts to restrict stablecoin reward programs. The industry says the GENIUS Act intentionally allows platforms – not issuers – to offer rewards. Crypto firms argue the dispute is about competition, not consumer safety, as banks move closer to issuing stablecoins.  In a joint letter delivered to Congress, a broad coalition of crypto companies warned lawmakers against revisiting provisions of the GENIUS Act that govern stablecoin rewards. The group argues that recent lobbying by traditional banks is aimed at narrowing the law in a way that would weaken competition and entrench incumbent financial institutions. Tyler Winklevoss, co-founder of Gemini, framed the effort as an attempt to reopen an issue lawmakers already resolved. In his view, banks are seeking regulatory changes not to improve safety, but to limit how crypto platforms compete for users. How the Law Was Designed to Work The GENIUS Act deliberately separates stablecoin issuers from platforms that distribute them. Issuers are prohibited from paying interest, a restriction meant to avoid bank-like risk. Platforms, on the other hand, are allowed to offer rewards using their own revenue streams. According to the crypto coalition, this structure was not accidental. It was crafted to protect the financial system while still allowing innovation at the platform level. The group compares stablecoin rewards to familiar payment incentives, such as credit card cash-back programs, which exist without banks paying interest on deposits. Banks Push Back as Stablecoins Go Mainstream Banking groups now argue…

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Filed under: News - @ December 20, 2025 5:27 pm