In recent weeks, the American Bankers Association and the Bank Policy Institute sent several letters to Congress attacking the GENIUS Act, the bipartisan stablecoin law that was passed after thorough and careful compromise. Their discussion does not address newly discovered risks or technical flaws. They want Congress to reinstate dead-end legislation because they don't want to compete with the next wave of financial technology.
This is important beyond the world of cryptocurrencies. This study reveals how America's largest financial institutions, when faced with competition, respond not by providing better service, but by lobbying to handicap alternatives.
As Americans prepare to celebrate 250 years of independence this July, it's worth asking some basic questions. Do we still believe in open markets and fair competition that underpin our prosperity? Or will incumbents get a veto over innovation every time competition breaks out?
Our country has built an economy defined by dynamism and innovation. There, new entrants can challenge incumbents, and individuals can choose how they save, spend, and build. The combination of individual freedom and open markets has underpinned America's 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, establishing a clear framework for the issuance, preparation, and oversight of payment stablecoins. Stablecoins are digital assets pegged 1:1 to the US dollar that use blockchain technology to provide access to dollars at internet speeds. Now, the big banking lobbies are stepping in to repeal the very provisions of the law that could force competition from new entrants.
This debate is not occurring in a vacuum. Policymakers had already mentioned stablecoin rewards over the summer. Today's efforts to review and reinterpret these decisions are driven less by newly discovered risks than by attempts to re-litigate settled law and slow competition after the fact.
The exchange over stablecoin rewards may sound technical, but it reflects a much larger issue. The question is: Will our financial future remain open and competitive, or will it become increasingly closed and controlled by a few large institutions? The SEC estimates that the nation's six largest financial institutions control assets worth more than 60% of the nation's GDP.
That concentration does not necessarily produce better service for consumers. Today, the average savings or checking account in the United States still pays well below 1% (According to the FDIC, it's actually 0.39% for savings and 0.07% for checking, a fraction of the current federal funds rate of 3.50-3.75%). This difference reflects a lack of competition, not a lack of consumer demand. When new technologies bring better benefits to consumers, the banking industry's response is consistent, claiming the sky is falling and lobbying against them. This is not rational surveillance and should concern anyone who believes in free markets.
The reason is simple. Demand persists even when competition in the financial system is inhibited (often at the urging of big bank lobbies). It is artificially suppressed. If policymakers set clear rules and allow fair competition, the United States will take the lead. When uncertainty and informal pressures replace clear laws, innovation moves elsewhere, often to jurisdictions with weaker standards and fewer protections.
A healthy market does not rely on a single choke point. It has competition and alternatives. New financial technologies, including stablecoins, still cannot replace essential banks. However, they can provide additional options. That means a way to move value more efficiently, benefit from instant payments, earn returns that better reflect market conditions, and give people more choice in how they manage their financial lives.
This is what America has always done best. From online commerce to mobile banking, advances in technology have expanded personal freedom and lowered barriers to entry. Financial innovation is no exception.
As America approaches its 250th anniversary, it's worth remembering that economic freedom and political freedom are deeply intertwined. The freedom to trade, save, invest, and build wealth has always been part of what has made America prosperous.
The debate over stablecoin rewards ultimately comes down to asking whether we still believe in the model. Do we want a financial system where progress depends on permission and where settled laws are restarted again and again to protect traditional incumbents who don't prioritize consumer interests, or one that combines strong rules with free competition and leaves Americans with meaningful choices?
America has never stood still and led. If we want to honor the values that built this country, we need to ensure our financial system remains open, competitive, and positioned for America's next 250 years of prosperity.
