The Clearing House Association joined the Bank Policy Institute, the American Bankers Association, the Consumer Bankers Association, and the Financial Services Forum in responding to the U.S. Department of the Treasury’s Advance Notice of Proposed Rulemaking (ANPR) under the GENIUS Act.

The Associations urge Treasury to do the following in rules issued to implement the GENIUS Act:

1. Implement the GENIUS Act’s prohibition on the payment of interest or yield on payment stablecoins in a manner that is consistent with Congress’s intent that such payments will  be broadly prohibited, whether paid directly by an issuer or indirectly by an issuer’s affiliates or partners.
2. Limit the risk of harmful regulatory arbitrage by precluding the possibility that material differences will arise among federal, state and foreign payment stablecoin regulatory regimes and by requiring that large permitted payment stablecoin issuers (“PPSIs”) be subject to federal regulation.
3. Establish appropriate requirements and oversight to combat illicit finance and national security risks posed by PPSIs, payment stablecoins and digital asset service providers (“DASPs”) and ensure relevant obligations are consistent between PPSIs, DASPs and banks.
4. Interpret the GENIUS Act’s prohibition on payment stablecoin issuance by public or foreign companies not predominantly engaged in financial activities in a fashion that respects the longstanding U.S. policy of separating banking and commercial activities and prevents the emergence of associated risks, including undue concentration of economic power.
5. Ensure that PPSIs hold reserves that back their payment stablecoins in custody and that all custodians for those reserves and payment stablecoins satisfy the highest standards for custody and safekeeping to protect customers, maintain market integrity, foster confidence and minimize conflicts of interest.
6. Confirm that PPSIs and payment stablecoins are subject to the same robust consumer protections applicable to other institutions and products that similarly facilitate payments and settlement.
7. Interpret the definition of “payment stablecoin” in the GENIUS Act to prevent loopholes and clarify the statute’s application to tokenized products issued by insured banks.
8. Interpret the obligations applicable to DASPs to uphold, and prevent evasion of, the requirement that the only payment stablecoins that DASPs may offer or sell in the United States are those issued by a PPSI or by a qualifying foreign payment stablecoin issuer (an “FPSI”).

To read the full letter click here.