Banks Push for Delay in Implementing Stablecoin Oversight Regulations Under the GENIUS Act

The cryptocurrency sector often finds itself at odds with bankers over regulatory matters, and now, a coalition of banking trade associations has requested that the US Department of the Treasury extend the public comment period for the implementation of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which was passed last year. In a letter addressed to the Treasury Department and the Federal Deposit Insurance Corporation, US bankers have asked for an extension of the comment periods for three separate rule proposals under the GENIUS Act, seeking a minimum of 60 days after the Office of the Comptroller of the Currency (OCC) concludes its rulemaking process. The OCC's effort to establish a framework for overseeing stablecoin issuers has significant implications for 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 at the FDIC.

According to the bankers, all these efforts are 'directly contingent' on the OCC's final framework, and collectively, they represent a regulatory undertaking of unprecedented scope and complexity, including proposals that have yet to emerge from the Federal Reserve and other agencies. The banking organizations, which include 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 rules. The Treasury Department has not immediately responded to a request for comment on the banking industry's request. Meanwhile, the same bankers are engaged in a debate with the crypto industry over stablecoin regulation, which has already led to delays in the Digital Asset Market Clarity Act and may jeopardize its chances of becoming law this year.