According to the latest reports, the U.S. banking industry is facing new challenges from the encryption currency sector. Several banking associations, including the Bank Policy Institute (BPI), recently issued a warning to Congress, calling attention to potential regulatory loopholes regarding stablecoin earnings in the GENIUS Act.

This loophole allows stablecoin issuers to provide yields to stablecoin holders through their affiliated companies. Banking representatives have stated that without restrictions, this practice could lead to as much as $6.6 trillion in deposits flowing from the traditional banking system to the stablecoin market.

Banking professionals are concerned that such a large-scale outflow of funds will have a serious impact on the traditional financial system. It may not only significantly reduce the pool of funds available for banks to lend, but also raise overall borrowing costs, thereby affecting the financing environment of the real economy.

This warning highlights the increasingly fierce competition between traditional financial institutions and the emerging encryption currency industry. As digital assets such as stablecoins become more widespread, finding a balance between encouraging financial innovation and maintaining financial stability has become an important issue for regulators.

How Congress responds to this call from the banking industry, and how the GENIUS Act will ultimately be formulated, will directly impact the development direction of financial technology in the United States. This incident again reminds us that in the rapidly changing era of financial technology, the formulation of regulatory policies needs to be more prudent and forward-looking.