The financial world is barreling toward a lobbying civil war in Washington. Cryptocurrency companies are increasingly coming to blows with banks and other Wall Street firms over Republican-led efforts to enact new rules for digital assets, creating a clash between powerful lobbying groups that is poised to come to a head next month when Congress returns from its August recess. The crypto industry has notched a series of lobbying victories since President Donald Trump returned to office earlier this year, including the first-ever legislative overhaul of digital asset regulations. Now, with Republicans on Capitol Hill preparing to pass a second, larger bill aimed at boosting the crypto market, Wall Street groups are starting to pump the brakes, warning that some crypto-friendly reforms could upend their businesses and threaten financial stability. The worry for some banks is that lenders could face deposit flight, with customers fleeing to more loosely-regulated crypto products. But the fight isn’t confined to Capitol Hill. It’s also spilling into more obscure corners of financial policy. For example, bank groups are trying to slow a push by crypto firms to secure national banking licenses. At the same time, crypto executives are lobbying the White House to preserve a ban on banks charging fees for access to customer data. Meanwhile, some traditional financial firms are warning Wall Street regulators about efforts to make stock trading look more like crypto. “Change is hard, and people — especially entrenched, successful people in organizations — are always going to shudder a little bit at the thought of a sea change,” said Dan Zinn, general counsel at OTC Markets, which operates stock trading systems. “It is absolutely waking everybody up, whether that is through a little bit of fear or a little bit of excitement.” The clash highlights how the lobbying dynamics on financial policy issues have shifted vastly in recent months as Washington has moved to embrace the crypto sector. The fervor on the right for embracing the crypto industry, which has poured hundreds of millions of dollars into Washington influence efforts in recent years, has in some cases outweighed the interests of traditional financial firms, which normally align with much of the GOP’s financial policy agenda. The lobbying fight has kicked into high gear this month as bank trade associations have called on lawmakers to retroactively amend through forthcoming legislation an already-signed crypto law that Congress adopted in July, sparking pushback from the crypto industry. (House Republicans are also pushing for retroactive changes to the measure after they opted to accept the Senate’s version of the bill.) Bankers have long been seen as skeptical of crypto. Leading industry figures including JPMorgan Chase CEO Jamie Dimon previously derided digital assets and their Washington agenda has long differed from the goals of digital asset firms. “This is a turf war that’s been going on for years, and frankly prevented us from passing any regulatory clarity up until now,” said Rep. Warren Davidson, an Ohio Republican who sits on the House Financial Services Committee and has been a longtime ally to the crypto industry. But for months, the leading trade associations representing the banking industry offered only tepid public criticism of fast-moving GOP legislation that aimed at giving regulatory legitimacy to digital assets. After Trump signed into law a major bill last month creating new rules for so-called stablecoins, a type of cryptocurrency that is pegged to the value of the dollar, they have become more vocal. Groups like the American Bankers Association are now pressing senators to make changes to the stablecoin law when they take up a second, larger crypto market structure bill next month. They want to block all crypto companies from paying yield to customers who hold stablecoins and repeal a section of the law that they say allows state-chartered uninsured depository institutions to operate nationwide without proper supervision. The concerns are especially pronounced for smaller banks, which say they could suffer from customers pulling their money out and parking it instead in crypto products like stablecoins. “It feels like there’s a move to replace us,” said Christopher Williston, president and CEO of the Independent Bankers Association of Texas, the only major bank group that came out against the stablecoin bill outright. The stablecoin bill, known as the GENIUS Act, is “a fundamental threat to bank deposits” for small lenders, Williston said, adding that the new law feels like “the thousand-and-first cut” for community banks “after 15 years of regulatory burden” imposed by reforms that followed the 2008 financial crisis. Crypto firms, which had lobbied for years for a stablecoin bill, insist the matter is settled. The GENIUS Act “is settled law,” said Summer Mersinger, CEO of the Blockchain Association, a leading industry trade group. “There was robust debate on the Hill, and the way this bill came out was a compromise from policymakers. So we really shouldn’t be trying to go back and reopen that.” Paige Pidano Paridon, executive vice president at the Bank Policy Institute, which represents large banks, said the group wanted to work collaboratively with the crypto industry to develop “clear, fair rules.” This isn’t bank vs. crypto — it’s about working together to create rules of the road that apply equally to everyone while protecting consumers and the financial system,” she said. “America’s financial system is built on trust and when your average consumer can’t distinguish between what’s safe and what’s not, risk increases, and American competitiveness suffers.” At the Securities and Exchange Commission, legacy financial players have been advocating for the Wall Street regulator to proceed cautiously as the agency considers the crypto industry’s pleas to “tokenize” U.S. stocks. Tokenization refers to the process of putting such assets onto the same blockchain technology that underpins crypto tokens like bitcoin and ether. Proponents argue tokenization will help make trading stocks faster and cheaper around the world. Yet, some like the Securities Industry and Financial Markets Association and Citadel Securities, the trading behemoth owned by GOP megadonor Ken Griffin, argue that tokenized stocks should follow the same rules as the thousands of conventional shares that trade today. Lobbyists expect the tokenization fight will play a role in the upcoming debate on Capitol Hill over a market structure bill, which would divvy up crypto oversight between market regulators. Senate Republicans have vowed to pass such a bill this fall. To be sure, the banking industry has hardly lost its influence in Washington, where the big bank CEOs still win Oval Office meetings and lenders are benefiting from Republicans’ sweeping deregulatory agenda. And some in the traditional financial industry are leaning into the promise of crypto. But, at the same time, the banking industry is navigating a political landscape that was shaped by the rush of campaign cash that crypto executives poured into the last election — and are again promising for the coming midterms. Crypto is a top policy priority for the White House and Trump, whose family is invested in various crypto ventures. Those dynamics make the industry a formidable force. At the Consumer Financial Protection Bureau, crypto executives successfully lobbied the Trump administration to back down from its effort to join with big banks to nullify a Biden-era “open banking” rule governing consumer data-sharing. The policy prohibits banks from charging for access to that data, which fintechs and crypto companies use to power their services and make it easier for customers to set up accounts and move money. After crypto executives teamed up with fintechs to intervene, the CFPB is now going back to the drawing table on the rule — instead of gutting it entirely. “Banks are still respected,” Davidson said, adding that Republicans have worked with the industry to roll back some post-2008 regulations. “But frankly, there are other aspects that banks have really enjoyed, benefits that have shielded them in a lot of ways from the market.”