ABA Warns of Regulatory Gaps in GENIUS Act Impacting Bank Lending
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 06 2026- Regulatory Warning: The American Bankers Association (ABA) has issued a warning regarding the GENIUS Act, highlighting regulatory gaps that could lead to capital migration from traditional bank deposits to interest-bearing stablecoins, significantly impacting small business and agricultural financing.
- Capital Migration Risks: ABA's analysis indicates that a 5% shift in deposits could reduce available lending capital by $85 billion, affecting over 50,000 small businesses, while a 10% shift could tighten credit availability by $170 billion.
- Consumer Protection Gaps: The GENIUS Act fails to establish clear capital requirements and consumer protection measures for interest-bearing stablecoins, lacking equivalent FDIC insurance, which increases risks for consumers seeking higher yields.
- Complex Legislative Process: The Senate Banking Committee plans to review ABA's concerns and consider amendments, with several months of negotiations expected to address key issues such as capital requirements for stablecoin issuers and consumer protection standards.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
