ICBA: GENIUS Act rules must protect local lending

ICBA said stablecoin rules should consider the effect on community bank deposits and credit availability in local communities.

Recommendations: In a letter responding to the Treasury Department’s proposed rule to implement section 3 of the GENIUS Act, ICBA said the final rule should:

• Keep bank deposits within the banking regulatory framework.

• Enable community banks to participate in the stablecoin ecosystem.

• Limit and safeguard foreign stablecoin activity.

• Ensure clear accountability for stablecoin claims.

• Protect community bank deposits that fuel local lending.

Background: Treasury in August proposed a rule that would bar entities from issuing payment stablecoins without obtaining a federal or state license. The proposal also seeks to define key terms including "issue" and "located in the United States."

Recent ICBA Advocacy:

• In recent letters to the OCC, federal banking regulators and the National Credit Union Administration, ICBA called for greater interagency coordination on GENIUS Act rulemaking.

• ICBA last month called on the FDIC to adopt a strict payment stablecoin framework.

• ICBA in May urged the OCC to strengthen its proposed GENIUS Act rules to protect against stablecoin risks.

• ICBA and other groups in May called on regulators to recognize and address several key risks in their first report on payment stablecoins.