The Conference of State Bank Supervisors (CSBS) outlined policy considerations for the U.S. Treasury Department and the federal banking agencies to foster a national regulatory framework for stablecoins and tokenized deposits.
The policy considerations seek to protect consumers, promote financial stability, and provide a level playing field for traditional financial institutions and new payment stablecoin issuers.
“Stablecoin and tokenized deposit efforts should proceed in tandem,” said CSBS President and CEO Brandon Milhorn. “All financial institutions that choose to innovate – from community banks to stablecoin issuers – should have the benefit of regulatory clarity so they can bring responsible blockchain-based financial products to market.”
In letters to the U.S. Treasury Department and the federal banking agencies, CSBS provided a blueprint for achieving the GENIUS Act’s vision of a state-federal regulatory framework that facilitates a dynamic and resilient stablecoin market in the United States.
Specifically, CSBS call for federal regulators to:
- Reinforce that the GENIUS Act’s “substantial similarity” standard creates a federal floor, not a requirement for nationwide uniformity;
- Encourage Treasury to maintain vital flexibility that allows issuers to choose between federal and state frameworks based on their organizational structures and business strategy; and,
- Argue for strict compliance with GENIUS Act limitations on financial activities by payment stablecoin issuers, along with robust capital and resolution planning requirements and federal rules that prevent evasion of the “interest” and “yield” prohibitions in the act.
In addition, CSBS urged the FDIC, Federal Reserve, and OCC to work with state supervisors to provide regulatory and supervisory clarity for tokenized deposit activities at traditional banks.
CSBS is the national organization of financial regulators from all 50 states, American Samoa, District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. State regulators supervise 79 percent of all U.S. banks and a variety of non-depository financial services.