Financial Institutions Urge Caution on GENIUS Act Implementation for Stablecoin Regulation

The cryptocurrency sector often finds itself at odds with banking interests, particularly in regulatory matters. Recently, a coalition of bank 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, the bankers are requesting that the comment periods for three GENIUS Act rule proposals be extended to at least 60 days after the Office of the Comptroller of the Currency (OCC) completes its rulemaking process. 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 contingent upon the OCC's final framework, and the collective regulatory work is of extraordinary scope and complexity. The banking organizations, including the American Bankers Association and the Bank Policy Institute, argue that they need sufficient time to evaluate the proposed rules together and against the finalized OCC framework to provide comprehensive and useful comments. The GENIUS Act is scheduled 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 yet responded to the request. Meanwhile, the same bankers are engaged in a debate with the crypto industry over the Digital Asset Market Clarity Act, which has been delayed for months and may not become law this year.