ICBA pledged to continue working with Congress on legislation to establish a regulatory framework for payment stablecoins following Tuesday’s 68-30 bipartisan Senate vote to pass the GENIUS Act (S. 1582).
About the Bill: The GENIUS Act outlines requirements for payment stablecoin issuance by banks and nonbanks, including reserve and AML/BSA requirements, to establish a federal regulatory framework for the largely unregulated stablecoin market.
ICBA Response: In a national news release following the vote, ICBA said it appreciates the Senate’s efforts to address community banker concerns with the bill to protect against the negative economic consequences that would result from community bank disintermediation. “ICBA understands the importance of having a clear regulatory framework for stablecoins and has worked closely with the Senate to incorporate critical guardrails to protect consumers and our payments system,” ICBA President and CEO Rebeca Romero Rainey said. “As the House determines how it will consider stablecoin legislation, ICBA looks forward to continuing to work with the House to ensure it is further strengthened to address community banker concerns so that the measure fully protects the role community banks serve in local communities across America.”
ICBA Advocacy: Throughout the debate, ICBA has worked closely with lawmakers to ensure the bill includes key community bank priorities. As a follow-up to community banker advocacy on stablecoin legislation during ICBA’s Capital Summit, ICBA urged senators to ensure the bill includes needed guardrails against community bank disintermediation, including in a recent letter. ICBA previously urged the Senate to ensure the act provides regulatory clarity while protecting against community bank disintermediation before voting on the measure.
Key Policies: To address community bank concerns with the bill, ICBA has repeatedly said the legislation must:
Not permit nonbank stablecoin issuers to obtain Federal Reserve Master Accounts.
Prohibit yield-bearing payment stablecoins and ensure the intent of the legislation cannot be evaded by offering other similar incentives.
Effectively limit permissible payment stablecoin issuer activities.
Prevent big tech firms from leveraging stablecoins to exploit the payments system, posing risks to consumers and the safety of the financial system.
Progress on the Bill: ICBA’s advocacy has resulted in positive changes to the bill 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.
Outlook: With passage of stablecoin legislation a top priority of President Donald Trump, the House will now determine whether to take up the GENIUS Act, work out key differences with its own bill—the STABLE Act (H.R. 2392)—or package it with crypto market structure legislation. ICBA will continue working with lawmakers to address outstanding areas of concern, such as ensuring final legislation does not violate the longstanding U.S. policy of maintaining the separation of banking and commerce.
