- The Conference of State Bank Supervisors (CSBS) has critiqued the U.S. Treasury’s proposed rules for state-issued stablecoins under the GENIUS Act.
- The core objection is that the Treasury is overreaching by incorporating rules from the federal Office of the Comptroller of the Currency (OCC), which the CSBS argues is not mandated by the law.
- State regulators believe the Act was designed to give them flexibility to foster innovation, provided they meet the GENIUS Act’s baseline requirements.
The Conference of State Bank Supervisors (CSBS) recently delivered critical feedback to the U.S. Treasury on its proposed implementation of the GENIUS Act for state-issued stablecoins. This state banking regulator group contends the Treasury is exceeding its statutory authority by incorporating federal banking rules. It argues the legislation provides a baseline for states to meet or exceed, not a rigid federal framework.
“The statute does not direct states to follow or defer to the OCC or any other federal payment stablecoin regulator,” the CSBS wrote. Consequently, it views the Treasury’s move as an unjustified expansion of federal oversight. The group also asserts the OCC is attempting to use the GENIUS Act to broaden the activities permitted for nationally chartered trusts.
A central theme of the objections is that the GENIUS Act intended to preserve state regulatory flexibility to encourage innovation. The law establishes a Stablecoin Certification Review Committee (SCRC) to certify state regulations. However, the Treasury’s proposal introduced “uniform” requirements that the CSBS opposes. It stated “Treasury may not adopt a principle for substantial similarity that prevents states from exceeding the standards or requirements” of the baseline Act.
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