Major US banking organizations have raised concerns about a new cryptocurrency regulation bill signed into law last month. The Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS), which aims to regulate stablecoins, faces opposition from banks who believe it contains loopholes that could destabilize the financial system. The American Bankers Association (ABA) and 52 banking organizations penned a letter to the Senate Banking Committee outlining their concerns. They argue that the current regulation, including its prohibition on interest payment by stablecoin issuers, is susceptible to circumvention by intermediaries like exchanges and brokers, turning stablecoins into potential credit mechanisms and impacting lending practices. The banks also worry about regulatory gaps that could increase deposit outflows during crisis periods, hindering the flow of credit and potentially raising borrowing costs for businesses and consumers. This is not investment advice.