Banks Push for Delay in Implementing Stablecoin Regulatory Framework

The cryptocurrency sector is witnessing bankers playing a crucial role in its key regulatory endeavors, with a coalition of bank trade associations now urging 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 are requesting a 60-day extension for commenting on three GENIUS Act rule proposals, following the completion of another rulemaking effort by the Office of the Comptroller of the Currency (OCC). The OCC's stablecoin issuer regulation is pivotal to the outcome of other rules being developed by the Treasury's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), as well as a related rulemaking by 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 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 immediately responded to a request for comment on the bank industry's request. The same bankers are also engaged in a stablecoin-related debate with the crypto industry, which has already led to a months-long delay in the Digital Asset Market Clarity Act and potentially jeopardized its prospects of becoming law this year.