American banking recently ran into a big problem. The GENIUS Act was found to have significant loopholes, and the U.S. Banking Association is rushing to fix them. The bill was originally designed to give banks more flexibility in providing loans to crypto companies (including mining farms, exchanges, etc.), but flaws in its design could cause things to spiral out of control.

In simple terms, the issues mainly revolve around these aspects:

First, the original intention of the bill was to relax banks' credit restrictions on the crypto industry to improve market liquidity. However, once the loopholes are exploited, banks might overextend their credit exposure, directly heading into high-risk areas.

Second, small banks are the biggest victims. They lack the risk control capabilities and capital reserves of large banks. If the crypto market experiences severe volatility, these banks could be hit hardest. The lessons from the FTX incident last year are still fresh—several financial institutions suffered huge losses due to excessive exposure.

Third, if these loopholes are not closed promptly, it could trigger a chain reaction of "crypto market collapse → financial institutions default." Especially with large inflows of stablecoins like USDT and USDC into the crypto ecosystem, systemic risk could be amplified.

The current situation is quite interesting: banks want to benefit from the growth of the crypto industry but are also afraid of being hit back by volatility. The final revision of the bill is still under negotiation and may become more cautious and conservative than originally planned. This could put short-term pressure on crypto companies' financing environment, but from a systemic stability perspective, this "reassessment" might not be entirely a bad thing.

The future direction depends on how regulators balance market innovation with risk prevention.