GENIUS Act yet again takes the center stage and this time the U.S. banking industry wants to pause on the comment periods for several stablecoin regulations. They urged a 60-day pause for the rule proposal.
Banks push back on GENIUS Act
The banking sector has been deeply involved as both consultants and vocal critics in the process of drafting the GENIUS Act. They feared that stablecoins would drain user deposits from traditional banking systems. Hence, they proposed stricter rules to ensure the higher-yielding and less-regulated alternative, like stablecoins.
This time, a coalition of bank trade associations has asked the U.S. Department of Treasury to extend the period to comment.
In a letter sent this week, they requested the extension of at least 60 days after another rule effort at the Office of the Comptroller of the Currency (OCC) is done, for three different GENIUS Act rule proposals.
OCC plays the role of a primary federal regulator under the GENIUS ACT. They focus on licensing, supervising, and settling the various risk standards for permitted stablecoin payment issuers.
Their push to implement its rules adds commendable value to the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) alongside the Federal Deposit Insurance Corporation (FDIC), developing regulations.
The 60-day extension for pending OCC framework
Reports stated the banks’ opinion that all the efforts are ‘directly contingent on the OCC’s final framework’
The collective efforts, in addition to regulatory proposals that haven’t yet emerged from the Federal Reserve and other agencies, “represent a body of regulatory work of extraordinary scope and complexity,” the bankers argued.
Meanwhile, the banking organizations, including the American Bankers Association and the Bank Policy Institute, say that the extended time period will give them enough room to produce more comprehensive reports that will serve sufficient grounds for participating agencies to build over.
“If we have sufficient time to evaluate the proposed rules together and to evaluate each against the finalized OCC framework,” they added.
Regulatory complexity deepens as agencies await OCC’s direction
So far, the U.S. Department of the Treasury has not publicly responded to the banking industry’s request for additional time.
The GENIUS ACT is expected to be established as a formal regulatory regime for stablecoins by 2027. While the timeline for the law is still a few years away, several agencies have already begun drafting rules tied to its provisions.
This is not the only extent to the participation of the banking industry in the crypto space. They have also been engaged in an ongoing debate with crypto industry participants over stablecoin oversight, a dispute that has already slowed progress on the Digital Asset Market Clarity Act.
