The US Banking Alliance, including the Bank Policy Institute, has expressed concerns over the GENIUS Act, signed by Donald Trump on July 18, 2025. The act, intended to regulate stablecoins, contains a loophole that could potentially redirect up to $6.6 trillion in bank deposits into the stablecoin market. This shift poses a significant threat to traditional banking by potentially weakening banks' credit creation capabilities and increasing loan rates, which could adversely affect households and businesses. The GENIUS Act prohibits stablecoin issuers from directly offering interest but does not extend this restriction to crypto exchanges. This allows platforms like Coinbase to offer returns on stablecoins such as USDC. In response, the US Treasury is seeking public input on the act's implementation, particularly regarding digital identity verification and blockchain monitoring. Experts advocate for a balanced regulatory approach to ensure consumer protection while promoting innovation.