Financial Institutions Request Delay in Implementing Stablecoin Regulatory Framework

The cryptocurrency sector is once again seeing bankers play a key role in shaping regulatory efforts, with a coalition of bank trade associations recently petitioning the US Department of the Treasury to extend the public consultation period for the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. In a letter addressed to the Treasury Department and the Federal Deposit Insurance Corp, bankers are seeking an extension of the comment period for three GENIUS Act rule proposals, requesting a minimum of 60 days after the completion of another rulemaking effort by the Office of the Comptroller of the Currency (OCC). The OCC's stablecoin issuer policing rule is pivotal to 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 on the OCC's final framework,' and collectively represent a regulatory undertaking of unprecedented scope and complexity. The banking organizations, including the American Bankers Association and the Bank Policy Institute, argue that their comments will be more comprehensive and useful to the agencies if they have sufficient time to evaluate the proposed rules together and against the finalized OCC framework. The GENIUS Act is slated for implementation by 2027, although federal agencies often grant extensions for complex rules. 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.