ICBA and other groups asked Congress to strike Section 16(d) of the recently enacted GENIUS Act and to oppose any expansion of its scope in this or future legislation.
Background: Section 16(d) allows any state-chartered uninsured depository institution with a stablecoin subsidiary to perform traditional money transmission and custody activities nationwide through that subsidiary.
Concerns: In a letter to leaders of the Senate Banking Committee and its Digital Assets Subcommittee, ICBA and the other groups said this unprecedented overriding of state law and supervision weakens vital consumer protections, creates opportunities for regulatory arbitrage, and undermines state sovereignty.
GENIUS Background: President Donald Trump recently signed into law the GENIUS Act, which establishes a regulatory framework for payment stablecoins.
ICBA Advocacy: ICBA’s advocacy resulted in positive changes to the Act throughout the legislative process, including strengthening language on Federal Reserve master account access, expanding the prohibition on yield/interest-bearing stablecoins to include other financial considerations, limiting nonfinancial publicly traded companies' ability to issue stablecoins, tightening permissible activities of issuers, and ensuring issuers cannot claim stablecoins are FDIC insured.
GENIUS Resources: ICBA recently published a summary of the GENIUS Act for community bankers that includes insights on the regulatory framework for payment stablecoins, policies on bank issuance, and more. In a recent Main Street Matters blog post, ICBA President and CEO Rebeca Romero Rainey spotlights what the law means for community banking, how ICBA has helped shape stablecoin policy, and the path forward.