US Banking Groups Push for Delay in Stablecoin Regulatory Implementation

The cryptocurrency sector is once again seeing bankers play a significant role in shaping its key regulatory initiatives. This time, 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, which was passed 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 different GENIUS Act rule proposals be extended to at least 60 days after the Office of the Comptroller of the Currency (OCC) finalizes its own rule for regulating stablecoin issuers. The OCC's rulemaking effort has significant implications for 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 at the FDIC. According to the bankers, all these efforts are directly contingent upon the OCC's final framework, and collectively represent a regulatory undertaking of unprecedented 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 enable them to provide more comprehensive and useful feedback to the agencies. The GENIUS Act is slated to come into effect by 2027, although it is not uncommon for federal agencies to grant extensions for complex rulemaking processes. The Treasury Department has yet to respond to a request for comment on the banking industry's request. Meanwhile, the same bankers are also engaged in a debate with the crypto industry over stablecoin regulation, which has already led to significant delays in the passage of the Digital Asset Market Clarity Act and may potentially jeopardize its chances of becoming law this year.