US Banks Urge Slower Implementation of Stablecoin Regulatory Framework

The cryptocurrency sector is witnessing increased involvement from bankers in its key regulatory endeavors. Recently, a coalition of bank 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 an extension of the comment periods for three separate GENIUS Act rule proposals. They are asking for a minimum of 60 days after the completion of another rulemaking effort at the Office of the Comptroller of the Currency (OCC). The OCC's rule for overseeing stablecoin issuers significantly impacts the outcome of other regulations 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 regulatory work, including proposals yet to emerge from the Federal Reserve and other agencies, is described as having "extraordinary scope and complexity." The banking organizations, which include the American Bankers Association and the Bank Policy Institute, argue that having sufficient time to evaluate the proposed rules together and against the finalized OCC framework will result in more comprehensive and useful comments for the agencies. The GENIUS Act is slated for implementation by 2027. While it is not uncommon for federal agencies to grant extensions for complex rule comment periods, the Treasury Department has not immediately responded to a request for comment on the bank industry's request. These same bankers are also engaged in a debate related to stablecoins with the crypto industry, which has managed to delay the Digital Asset Market Clarity Act for months and potentially jeopardize its chances of becoming law this year.