Banks Urge Caution on Stablecoin Regulatory Implementation

The cryptocurrency sector often finds itself at odds with bankers over regulatory matters, and now, a coalition of bank trade associations is requesting that the US Department of the Treasury extend the public consultation period for the implementation of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which was passed last year. In a letter sent to the Treasury Department and the Federal Deposit Insurance Corporation this week, US bankers are seeking extended comment periods for three different GENIUS Act rule proposals, which should be at least 60 days after the Office of the Comptroller of the Currency (OCC) completes its rulemaking effort. The OCC's push to implement its rule for overseeing stablecoin issuers has significant implications for other rules being pursued by the Treasury's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), as well as a related rulemaking at the FDIC. According to the bankers, all these efforts are 'directly contingent on the OCC's final framework.' The collective efforts, along with regulatory proposals that have not yet emerged from the Federal Reserve and other agencies, 'represent a body of regulatory work of extraordinary scope and complexity.' The banking organizations, including the American Bankers Association and the Bank Policy Institute, stated that their comments 'will necessarily be more comprehensive, and therefore more useful to the agencies, if we have sufficient time to evaluate the proposed rules together and to evaluate each against the finalized OCC framework.' The GENIUS Act is scheduled to be in place by 2027, although it is not uncommon for federal agencies to grant extensions for complex rules. The Treasury Department did not immediately respond to a request for comment on the bank industry's request. The same bankers are also involved in a stablecoin-related debate with the crypto industry, which has delayed the Digital Asset Market Clarity Act for months and potentially jeopardized its chances of becoming law this year.