The banks that lost the stablecoin fight in Washington last year are trying to win it back, and this time they have built a rival network to hedge their bets.
Wall Street just admitted it is scared. According to Bloomberg, JPMorgan Chase, Bank of America, HSBC, Citigroup and Wells Fargo are mounting a lobbying campaign in Washington to narrow the law that legalized stablecoins last year, the GENIUS Act, which President Trump signed on July 18, 2025. The banks want two things: a tighter ban on crypto companies paying yield to stablecoin holders, and less room for state-chartered issuers to operate nationally without the same federal grip banks already live under.
Here's what is driving the panic. A Treasury Department report released in April 2025 estimated that stablecoins could pull as much as $6.6 trillion out of bank deposits if issuers or their partners can offer yields that look like bank-account returns. Bank of America CEO Brian Moynihan has pointed to that same Treasury warning publicly, because a checking account that pays almost nothing looks weak next to a crypto wallet paying 4% or 5%. One related estimate from the American Bankers Association put the possible hit to bank lending capacity between $65 billion and $1.26 trillion. That is a wide range. It tells you nobody actually knows the number, but the direction worries every CFO in the industry.
The dispute is not about whether stablecoins should exist. That fight is over. The GENIUS Act already bars stablecoin issuers themselves from paying interest, but banks say the law left the side door open. A crypto exchange like Coinbase, an issuer's affiliate, or another third party can still hand out rewards that function almost exactly like interest. Banking groups want Congress to close that loophole in the next market-structure bill. Coinbase's in-house lobbyist put it plainly to Bloomberg Government: banks are not happy with the deal they made in the GENIUS Act, and they want a do-over.
Crypto firms are not taking this quietly. They argue the banks negotiated the GENIUS Act's terms themselves last year, lost the yield fight then, and are now trying to relitigate it through the back door because the technology is working better than the banks expected. The stablecoin market has now moved past $300 billion, according to recent market data cited by The Economic Times, and growth has not slowed.
The banks' backup plan
JPMorgan, Bank of America, Citigroup and Wells Fargo are not betting everything on Congress. The Wall Street Journal reported in June that those banks are planning a shared tokenized deposit network through The Clearing House, the payments utility owned by major banks, with a possible launch in the first half of 2027. Think of it as a Zelle for blockchain money: instant settlement and programmability, built inside the regulated, FDIC-backed perimeter banks already control.
JPMorgan CEO Jamie Dimon is being unusually direct about the fight. In a Fox Business interview reported last week, Dimon said JPMorgan would oppose CLARITY Act provisions that allow yield-paying stablecoins, adding that if the bank loses, it will live with the result. That is not a theoretical objection. The tokenized deposit network is the operational hedge in case the lobbying fails.
That is the real story here. If banks can offer programmable, blockchain-based deposits with the same instant-settlement appeal as a stablecoin, minus the yield fight, they weaken the political case for letting non-bank issuers pay users more. Frankly, this is competition dressed up as consumer protection.
The rulemaking clock is running
The GENIUS Act gives regulators a hard job and not much time. The law requires the primary federal stablecoin regulators, the Treasury Department and state stablecoin regulators to issue implementing rules within one year of enactment, which puts that rulemaking deadline on July 18, 2026. The statute itself takes effect on the earlier of 18 months after enactment, or 120 days after final implementing rules are issued. So the practical deadline is not one date. It is a moving window that banks and crypto firms are both trying to shape before the rules harden.
The American Prospect reported in June that crypto firms have largely gotten what they wanted in the early rulemaking process. That explains why banks have shifted the fight back to Congress. Regulators can define the operating rules, but Congress can still change the law itself.
None of this is settled. A retroactive amendment needs votes, and crypto's lobbying operation is not small either. But the fact that five of America's largest banks are pushing to rewrite a law they helped write twelve months ago tells you how fast stablecoins have moved from curiosity to threat. Whoever wins this one sets the terms for how money moves in this country for a long time.
Also read: Bitcoin ETFs Bled $4.67 Billion in Q2 as AI Stocks Stole the Money • Stablecoin Supply Shrinks by $10 Billion Just as Circle Wins a Bank Charter • Strategy Sells $216 Million in Bitcoin to Pay a Dividend It Owes in Dollars
