Financial Institutions Urge Caution on Stablecoin Regulatory Implementation

The cryptocurrency sector is once again finding itself at the center of bankers' regulatory efforts, as a coalition of banking trade associations has petitioned the US Department of the Treasury to extend the public consultation period for the implementation of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, enacted last year. In a letter addressed to the Treasury Department and the Federal Deposit Insurance Corporation this week, US bankers have requested that the comment periods for three separate GENIUS Act rule proposals be extended to at least 60 days after the completion of another rule-making effort by the Office of the Comptroller of the Currency. The OCC's stablecoin issuer policing rule has significant implications for the outcomes of other rules being pursued by the Treasury's Office of Foreign Assets Control and the Financial Crimes Enforcement Network, as well as a related rule-making effort at the FDIC. According to the bankers, all these efforts are "directly contingent on the OCC's final framework," and collectively represent a regulatory undertaking of unprecedented scope and complexity. The banking organizations, including the American Bankers Association and the Bank Policy Institute, argue that their comments will be more comprehensive and useful to the agencies if they have sufficient time to evaluate the proposed rules together and assess each against the finalized OCC framework. The GENIUS Act is slated to come into effect by 2027, although it is not uncommon for federal agencies to grant extensions for complex rule comment periods. The Treasury Department has not yet responded to a request for comment on the banking industry's request. Meanwhile, the same bankers are engaged in a stablecoin-related debate with the crypto industry, which has already led to months of delay for the Digital Asset Market Clarity Act and potentially jeopardized its chances of becoming law this year.