Banking Groups Urge Slower Implementation of Stablecoin Regulatory Framework

The cryptocurrency sector often finds itself at odds with banking interests, and now, a coalition of bank trade associations is petitioning the US Department of the Treasury to prolong the public consultation period for 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 that the comment periods for three distinct GENIUS Act rule proposals be extended by at least 60 days after the completion of another rulemaking effort by the Office of the Comptroller of the Currency. The OCC's push to implement its rule for overseeing stablecoin issuers has significant implications for the outcome of other rules being pursued by the Treasury's Office of Foreign Assets Control and the Financial Crimes Enforcement Network, 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 endeavors, including proposals that have yet to emerge from the Federal Reserve and other agencies, constitute a 'body of regulatory work of extraordinary scope and complexity.' The banking organizations, including the American Bankers Association and the Bank Policy Institute, argue 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 slated to be implemented by 2027, although it is not uncommon for federal agencies to grant extensions for complex rule comment periods. The Treasury Department has not 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 managed to delay the Digital Asset Market Clarity Act for months and potentially jeopardize its chances of becoming law this year.