The Clearing House Association joined four banking trade associations (ABA, BPI, CBA, and ICBA) in a letter commenting on the Federal Deposit Insurance Corporation’s (FDIC) proposed rules to implement the GENIUS Act’s approval requirements for payment stablecoin issuers. Among other things, the Associations contend that the comment period for the proposal is too short for stakeholders to fully evaluate the approval framework in light of the other GENIUS Act that are not yet final, particularly the FDIC’s substantive rules for issuers related to capital, liquidity, and risk-management. They also call for stronger interagency coordination among the FDIC, Federal Reserve, OCC, and NCUA to avoid inconsistent approval standards for permitted payment stablecoin issuers (PPSIs) that are regulated by different agencies and the risk of regulatory arbitrage.

 

In addition to commenting on the FDIC’s process for implementing the GENIUS requirements, the Associations urge the FDIC to allow public comment on PPSI applications, impose additional scrutiny and safeguards for industrial loan company (ILC) applicants, and to establish transparent, risk-based waiver standards for temporary exemptions to the approval requirements. Lastly, the Associations recommend that the FDIC commit to reevaluating its regulatory framework for PPSIs after three years as the stablecoin market evolves to support innovation and payments efficiency while protecting consumers, competition, and financial stability. To read the full letter click here.