David Sachs, a businessman designated by Donald Trump, known as “Crypto Zar,” poses and insisted on the newly approved genius law. It was traditional banks that imposed conditions that would limit the competition for stubcoins. According to Sacks, the ban on emitters to transfer interest to holders is a “commitment” necessary to achieve bank support, and they see a direct threat to their business model at Stablecoins.
The Genius Act, approved on June 20, 2025, aims to regulate US stubcoins. With the aim of protecting consumers, like reported encryption. However, the ban on making profits for holders has caused controversy. This means that new laws will prevent interest from paying to those who own those tokens (holders) as the companies or platforms that create and manage these assets.
In an interview released on June 20, Sacks argued that the measure, although not essential to approving the law, was imposed due to pressure from community banks, who feared that 5% interest in Stablcoins would “close business.”
Sack is aware of the bank’s concerns, but he thinks they are exaggerating. “I don’t think that’s what happened,” he said. He suggested that restrictions are a setback in sector innovation. Furthermore, he hoped that this provision would be reviewed in the future, particularly if the banks were involved in the stubcoin space, to allow for greater freedom for emitters.
Critics of Sack seem to resonate in the community, and the law is perceived as protecting traditional interests at the expense of competition. Max Keizer, for example, expressed his dissatisfaction about it, saying Stablcoins “is designed to be a route to access the US dollar, empowering politicians and emitters who work with traditional banks to combat Bitcoin’s self-existence.”
This limit could limit the growth of decentralized finance (DEFI) that relies on liquidity and yield stubcoin. For many, the genius law promotes adoption, but prioritizing traditional banks slows innovation.