Banks Push for Delay in Implementing Stablecoin Oversight Rules Under GENIUS Act

The cryptocurrency sector often finds itself at odds with bankers over regulatory matters, and now a coalition of banking associations is urging the US Department of the Treasury to extend the public consultation period for 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 rule proposals under the GENIUS Act be extended by at least 60 days after the Office of the Comptroller of the Currency (OCC) completes its own rulemaking process for overseeing stablecoin issuers. The OCC's efforts are crucial in determining the outcome of other regulations 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 initiatives are 'directly contingent on the OCC's final framework' and, together with other regulatory proposals from the Federal Reserve and additional 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 having sufficient time to evaluate the proposed rules in conjunction with the finalized OCC framework will allow them to provide more comprehensive and useful comments 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 not yet responded to a request for comment on the banking industry's request. Meanwhile, the same bankers are engaged in a dispute with the crypto industry over stablecoin regulation, which has already led to a delay in the Digital Asset Market Clarity Act and may potentially jeopardize its chances of becoming law this year.