ICBA Letter to Senate Ahead of GENIUS Act Stablecoin Vote

In a letter to each Senate office on the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (S. 1582), ICBA said community bank disintermediation caused by deposit migration to payment stablecoins would create a cascade of issues that impact safety and soundness, lending, and access to banking services in smaller communities across the United States.

Proper Regulation: To address community bank concerns before a vote on the GENIUS Act, ICBA said senators must:

• Clarify the legislative language to ensure that nonbank stablecoin issuers are not permitted to obtain Federal Reserve Master Accounts.
• Further strengthen language in the bill prohibiting yield-bearing payment stablecoins to ensure the intent of the legislation cannot be evaded through affiliate relationships or by offering other incentives.
• Revise Section (7)(B) to more effectively align with the intent to limit permissible payment stablecoin activities.
• Ensure the legislation clearly prevents big tech and other non-financial firms from leveraging stablecoins to exploit the payments system and pose a risk to the safety of the financial system.