Wall Street’s biggest banking groups argue that stablecoins could drain up to $6.6 trillion from deposits , threatening the ability of banks to fund loans. They warn this would lead to higher interest rates, fewer loans, and more expensive credit for both households and businesses. Some compare the shift to the 1980s, when money market funds lured savers away from banks. Analysts say lenders might have no choice but to raise deposit rates or rely on costlier wholesale funding. Smaller banks are especially worried, with community lenders calling the GENIUS Act a direct threat to their survival. Banks are urging Congress to amend the law, blocking crypto firms from paying yield and stopping state-chartered crypto banks from expanding nationwide. Meanwhile, crypto advocates argue banks are just trying to protect their turf , claiming stablecoins offer better innovation, consumer choice, and efficiency. The battle stretches beyond stablecoins into data rights and asset tokenization, where Wall Street insists new digital products must follow the same rules as traditional markets. But momentum is shifting in crypto’s favor. With strong political backing, heavy lobbying, and the White House treating digital assets as a priority, the clash between banks and crypto is escalating into a full-blown turf war .
