OCC Urges Community Banks to Embrace Payment Stablecoins Under New GENIUS Act Rules

The OCC officially backs community banks stepping up as issuers of payment stablecoins.

In a statement on X (formerly Twitter) this past Monday, the OCC expressed support for enhancing payment stablecoin activities within the community banking sector, referencing its finalized regulations implementing the GENIUS Act. The new legislation focusing on payment stablecoins is slated to take effect in January, with the OCC having released its final rule set just last week.

The regulator recommended that interested community banks consider applying either directly or through their subsidiaries to become authorized issuers of payment stablecoins, as appropriate.

This appeal comes amid opposition from various banking groups who have criticized the OCC’s proposed stablecoin yield rules, arguing that these regulations contradict the legislative intent of GENIUS. Should community banks enter the stablecoin arena in significant numbers, they could pose substantial competition to existing crypto operators and financial entities holding large market shares.

Community banks have already initiated legal proceedings against the OCC due to its approval of banking charter applications submitted by cryptocurrency firms. Earlier this month, the Independent Community Bankers of America filed a lawsuit claiming that crypto companies have an unfair edge over community banks by not being held to the same regulatory standards.