A Treasury Department proposal to implement the Genius Act should not allow nonbank entities to bring unregulated stablecoins into the U.S. market through intermediaries, nor should it constrain legitimate bank activities, the American Bankers Association said today.
Treasury released proposed rulemaking in August to require digital asset providers to obtain a federal or state license before issuing payment stablecoins, as required by the Genius Act. In comments on the proposal, ABA offered several recommendations to improve the rule before it is finalized. They include defining key terms in the proposal so stablecoin issuers cannot sidestep their legal obligations, holding foreign issuers to substantively equivalent standards, and better coordination across agencies to establish Genius Act regulation.
“The final rule should close paths that would let issuers and intermediaries evade the Act’s protections and prohibitions,” ABA said. “It should give banks and other market participants clear lines, so that providing ordinary services to issuers and customers does not expose them to criminal liability for another party’s violation. And it should protect holders when an issuer’s status changes, so that they have notice of the change in the issuer’s status and a clear path to redemption or divestment of their payment stablecoins.”
The rulemaking is just one of several proposals to implement the Genius Act. Treasury also released proposed rulemaking to establish how federal regulators will review state regulatory regimes, as the law allows issuers to opt for state regulation if those regimes are substantially similar to the federal framework.
