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 this time, a coalition of banking trade associations has petitioned the US Department of the Treasury to extend the public consultation period for implementing 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 are requesting that the comment periods for three separate GENIUS Act rule proposals be extended by at least 60 days after the Office of the Comptroller of the Currency (OCC) completes its own rulemaking effort. The OCC's stablecoin issuer policing rule 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.' The collective regulatory efforts, including proposals that have not yet emerged from the Federal Reserve and other agencies, 'represent a body of regulatory work of extraordinary scope and complexity.' The banking organizations, which include 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 scheduled 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 banking industry's request. The same bankers are also engaged in a stablecoin-related debate with the crypto industry, which has already delayed the Digital Asset Market Clarity Act for months and potentially jeopardized its chances of becoming law this year.