Joint Industry Letter to-Senate on Stablecoin Rewards

The Honorable Tim Scott, Chairman
The Honorable Elizabeth Warren, Ranking Member
U.S. Senate Committee on Banking, Housing, and Urban Affairs 534 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Chairman Scott and Ranking Member Warren:

We, the undersigned organizations and companies, write to oppose efforts to reinterpret and expand the GENIUS Act’s prohibition on interest or yield beyond what Congress enacted. Proposals to limit or prohibit rewards or incentives offered by platforms or other third parties in secondary markets would reopen a settled issue, undermine a carefully negotiated compromise, reduce consumer choice, suppress competition, and inject uncertainty into the implementation of a new law before regulations have even been proposed.

GENIUS reflects a deliberate and calibrated balance. Congress prohibited stablecoin issuers from paying interest or yield to those holding stablecoins, while intentionally preserving the ability of platforms, intermediaries, and other third parties to offer lawful rewards or incentives to consumers. That distinction was not accidental. It addresses the balance-sheet and perceived maturity-transformation risks associated with stablecoin issuance while allowing services that distribute and enable the use of stablecoins to innovate on payment experiences and provide customer choice at the application layer.

The push to restrict stablecoin rewards beyond that agreed to in GENIUS is not a technical refinement or a consumer protection fix. It would prohibit the same types of incentive programs for stablecoin payments that banks have long offered on credit cards and other types of payment services, even though bank deposit-taking and lending activities create far more balance sheet and maturity-transformation risk than GENIUS-regulated stablecoin issuers. The result would be fewer choices for consumers, greater market concentration in the hands of a small number of firms, and less competition in payments and financial services. Due to this asymmetry, the digital asset and fintech ecosystem views this proposal as overtly protectionist, rather than principled.

The consumer impact is real. With the federal funds rate at approximately 3.50–3.75%, average checking account yields remain near 0.07% and savings accounts around 0.40%.1 Stablecoin rewards programs enable platforms to share value directly with users, helping households benefit from higher-rate environments rather than absorbing losses to inflation. Eliminating or curtailing these programs would take money directly out of consumers’ pockets at a time when Congress is rightly focused on affordability, cost-of-living pressures, and household financial resilience.

Evidence does not support claims that stablecoin rewards threaten community banks or lending capacity. For example, a Charles River Associates analysis of stablecoin adoption from 2019 to 2025 found no evidence of disproportionate deposit outflows from community banks.2 Moreover, it is difficult to reconcile claims that banks are genuinely constrained by deposits against the roughly $2.9 trillion of bank reserve balances currently earning interest at the Federal Reserve rather than being deployed into loans.3 Opposition to stablecoin rewards reflects protection of incumbent revenue models, not safety-and-soundness concerns.

Just as importantly, the potential benefits of payment stablecoins will not be realized if these types of payments cannot compete on a level playing field with other payment mechanisms. Rewards and incentives are a standard feature of competitive markets where network effects and switching costs are high—including today’s markets for payment services. Stablecoins offer consumers concrete advantages over legacy payment systems—faster settlement, lower transaction costs, and greater transparency—and rewards are a critical tool for encouraging adoption. Removing incentives prevents competition and unfairly disadvantages a new technology before it can take hold.

Reopening this issue before the GENIUS Act’s implementation would weaken the certainty that defines Congressional-enacted regulatory frameworks and introduce unnecessary risk into the broader market structure effort. It would signal that even recently enacted compromises remain subject to almost immediate renegotiation, undermining the predictability that markets, consumers, and innovators rely on. More fundamentally, forcing any change to the economics of stablecoin distribution at this stage risks fracturing the bipartisan and industry support necessary for any market structure bill itself to succeed.

For these reasons, we urge Congress to reject any effort—whether in market structure legislation or elsewhere—to limit or prohibit lawful rewards offered by platforms or other third parties consistent with GENIUS. Preserving the balance Congress struck is essential to protecting consumers, fostering competition, and ensuring that market structure legislation can advance on a bipartisan and durable basis, rather than becoming a vehicle for entrenching legacy interests at the expense of innovation.

Sincerely,

(Please see attached PDF for all organizations.) 
 

¹https://www.federalreserve.gov/newsevents/pressreleases/monetary20251210a.htm
²https://www.crai.com/insights-events/publications/study-from-cra-about-impact-of-stablecoins-adoption-on-community-bank-deposits/ ³https://fred.stlouisfed.org/series/TOTRESNS