In recent weeks, the American Bankers Association and Bank Policy Institute sent several letters to Congress attacking the GENIUS Act, bipartisan stablecoin legislation that was passed and became law after thorough and careful compromise. Their arguments don’t cite newly discovered risks or technical flaws. They’re asking Congress to reopen settled law because they don’t want to compete with the next wave of financial technology.
This matters beyond the world of cryptocurrency. It reveals how America’s largest financial institutions respond when they face competition: not by offering better services, but by lobbying to handicap the alternatives.
As Americans prepare to celebrate 250 years of independence this July, it’s worth asking a basic question: Do we still believe in open markets and fair competition that underpin our prosperity? Or do incumbents get veto power over innovation whenever competition emerges?
Our country built an economy defined by dynamism and innovation — where new entrants could challenge incumbents and individuals could choose how they save, spend, and build. The combination of personal liberty and open markets has powered American economic success for nearly two and a half centuries.
Today, that tradition is under pressure in a place most Americans rarely think about: the financial system. Last summer, Congress passed the bipartisan GENIUS Act, which established a clear framework for the issuance, reserves, and oversight of payment stablecoins. Stablecoins are digital assets pegged 1:1 to the U.S. dollar that use blockchain technology to provide access to the dollar at the speed of the internet. Now the big bank lobby is stepping in to dismantle the very provisions of the law that may force them to compete with new entrants.
This debate is not happening in a vacuum. Policymakers already addressed stablecoin rewards over the summer. Today’s efforts to revisit or reinterpret those decisions are not driven by newly discovered risks, but by attempts to re-litigate settled law and blunt competition after the fact.
The back and forth over stablecoin rewards may sound technical, but it reflects a much larger question: whether our financial future will remain open and competitive, or become increasingly closed and controlled by a small number of large institutions. The SEC estimates that the six largest domestic financial institutions control assets equivalent to more than 60% of our GDP.
That concentration does not necessarily yield better services for consumers. Today, the average American savings or checking account still pays well under one percent (0.39% in fact for savings and 0.07% for checking according to the FDIC, a tiny fraction of the current 3.50-3.75% Fed Funds rates). That gap reflects a lack of competition, not a lack of consumer demand. When new technologies offer consumers better returns, the banking industry’s response has been consistent: claim the sky is falling and lobby against them. That’s not reasonable scrutiny and it should concern anyone who believes in free markets.
The reason is straightforward. When competition in the financial system is discouraged — often at the urging of the big bank lobby — demand does not disappear. It is artificially suppressed. When policymakers provide clear rules and allow fair competition, the United States leads. When uncertainty or informal pressure replaces clear law, innovation moves elsewhere, often to jurisdictions with weaker standards and fewer protections.
A healthy market does not rely on a single chokepoint. It has competition and alternatives. New financial technologies, including stablecoins, are not a replacement for banks, which remain essential. But they can provide an additional option — a way to move value more efficiently, benefit from instant settlement, and earn returns that better reflect market conditions, giving people more choice in how they manage their financial lives.
This is what America has always done best. From online commerce to mobile banking, technological advances have expanded individual freedom and lowered barriers to entry. Financial innovation should be no different.
As America nears its 250th birthday, it is worth remembering that economic liberty and political liberty are deeply connected. The freedom to transact, save, invest, and build wealth has always been part of what made America prosperous.
The debate over stablecoin rewards ultimately asks whether we still believe in that model. Do we want a financial system where progress depends on permission and settled law is reopened time and again to protect traditional incumbents who do not prioritize consumer interests? Or one that pairs strong rules with open competition and trusts Americans with meaningful choice?
The United States has never led by standing still. If we want to honor the values that built this country, we should ensure our financial system remains open, competitive, and positioned for the next 250 years of American prosperity.
