The interested economic parties are lining up on opposing sides of how the GENIUS Act should be interpreted, particularly (though far from only) with regard to the prohibition on the paying of interest on stablecoins.  

The right approach to the regulation of consumer credit is a difficult issue. However, it is not infrequently the case that regulators and politicians who seek to do good or be protective of the poor end up adopting policies that discourage lending to those who need it. (See, e.g., .)

There is some inherent irony in the fact that the U.S. regulators repeatedly criticized the limited availability of financial services to low-income individuals and simultaneously attacked those…

There is a lot at stake in the meaning of the word "interest," as initially interpreted by Treasury and then likely by the courts. Today, the Blockchain Association (supported undoubtedly by numerous others) argues for a narrow definition of the term. Note yesterday's article in which bankers argued for a broad definition. .

Here are the words of the statute: (11) PROHIBITION ON INTEREST.—No permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay the…

It is unfortunately the case that policies that make a show of protecting lower income consumers have the effect of making products unavailable to them. It is obvious that there is an administrative cost to making a loan, and that the administrative cost is not an entirely variable amount; there is a certain minimum cost for making any loan. If legislation makes it impossible for a bank to earn an amount equal to the sum of (i) the administrative cost of the loan, (ii) the cost of the money…