State bank supervisors want to ensure that Congress “has its eyes wide open” on the possible impact on bank deposits as lawmakers consider cryptocurrency regulation, Conference of State Bank Supervisors President and CEO Brandon Milhorn said today at the American Bankers Association’s Washington Summit.
During a Q&A with ABA President and CEO Rob Nichols, Milhorn addressed bankers’ concerns about a legal loophole that could allow crypto firms to bypass the Genius Act’s prohibition on payment of interest on stablecoins. He noted the current U.S. stablecoin market stands at about $300 billion, but Treasury Secretary Scott Bessent had predicted that market could grow to about $3 trillion by 2030.
“My question is, from where?” Milhorn said. “If it comes from our banks … that’s small-business loans, that’s agricultural loans that are not being made by banks. That is a real concern.”
CSBS wants to preserve the balance struck in the Genuis Act by including the prohibition, in which stablecoins are a new technology available to consumers for payments but not detrimental to banking, he said.
