WASHINGTON–A coalition of banking associations has submitted recommendations to the Treasury on implementing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, urging regulations that protect consumers and financial stability while preserving the benefits of stablecoins for payments.
The submission was led by the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum and The Clearing House Association.
In their letter, the five organizations called on Treasury to ensure that stablecoin regulations reflect Congress’s intent while “preventing risks related to consumer protection, credit availability, illicit finance, competition, and overall financial stability.”
What to Do, What to Avoid
“The associations believe that it will be critical that the Treasury Department and applicable regulators craft regulations under the GENIUS Act that preserve the benefits of payment stablecoins for their intended use in payments and settlements, without causing undue and unnecessary risks for consumers, other stablecoin holders or users, competition, credit availability, illicit finance or financial stability,” the letter states:
Among the recommendations:
- Stablecoins should not pay interest or yield, a prohibition the groups recommend be extended to digital asset service providers such as exchanges and affiliates.
- Measures to prevent regulatory arbitrage should be enacted to ensure stablecoin issuers are subject to the same rules as other financial institutions performing equivalent activities, both domestically and internationally.
- Strict anti-illicit finance safeguards should be enforced to maintain the separation of banking and commerce, and ensuring that stablecoin issuers provide clear disclosures on reserves and uphold rigorous custody standards to foster trust and avoid conflicts of interest.
