Joint Letter on Implementing the GENIUS Act for Stablecoin Issuers

Dear Comptroller Gould, Vice Chair Bowman, Chairman Hill, and Chairman Hauptman:

The undersigned trade associations (the "Associations") are writing to emphasize the importance of coordination among your agencies in finalizing rules under the Guiding and Establishing National Innovation for U.S. Stablecoins Act. The GENIUS Act generally prohibits any person other than a permitted payment stablecoin issuer ("PPSI") from issuing a payment stablecoin in the United States.

It further prohibits digital asset service providers from offering or selling a payment stablecoin to a person in the United States unless the issuer is a PPSI or the issuer is a foreign payment stablecoin issuer that meets certain requirements. The GENIUS Act sets forth various regulatory and licensing requirements for PPSIs and foreign payment stablecoin issuers and requires your agencies – the primary Federal payment stablecoin regulators – and the Department of the Treasury to issue regulations to establish a Federal payment stablecoin regulatory framework. The way in which the GENIUS Act is implemented, and the prudential and compliance requirements that will apply to payment stablecoin issuers, could have significant effects on financial stability, credit creation, consumer protection, illicit finance risk, and the broader economy.

Indeed, we have recently written to you to express our deep concern about the potential risks that payment stablecoin issuers and their activities pose to the larger financial system. Our letter highlights that payment stablecoin issuers are vulnerable to runs, rapid redemption of payment stablecoins can cause contagion, the growth of payment stablecoins could cause credit to contract, and stablecoin lending presents risks for the broader financial system. We sent this letter in connection with the requirement under section 15(a) of the GENIUS Act that the primary Federal payment stablecoin regulators annually prepare a report on the payment stablecoin industry that includes "a description of the potential financial stability risks posed to the safety and soundness of the broader financial system by payment stablecoin activities." However, these same risks should inform each agency's rulemaking under the GENIUS Act more generally. Therefore, it is of the utmost importance that the requirements that apply to PPSIs are identical under your respective rulemakings to guard against the risks that are presented by payment stablecoins and prevent regulatory arbitrage.

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