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US OCC calls on community banks to become payment stablecoin issuers
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- DeepHorus
The Office of the Comptroller of the Currency (OCC) is urging community banks to enter the payment stablecoin market. In a Monday post on X, the regulator said it was âencouraging the development of payment stablecoin capabilitiesâ in community banking. The push follows the OCCâs finalized rules for the GENIUS Act.
The OCC finalized its rules for the GENIUS Act last week. The lawâthe Guiding and Establishing National Innovation for US Stablecoins Actâtakes effect in January. The regulator said interested community banks should consider applying to become, or for a subsidiary to become, a permitted payment stablecoin issuer.
If enough community banks enter, they could challenge the market share of crypto companies and financial institutions. The OCCâs plea comes as banking advocacy groups push back against its proposed rules on stablecoin yield. Some argue those rules conflict with congressional intent behind GENIUS.
Community banks are already in legal action against the OCC over its approval of charter applications from crypto companies. Earlier this month, the Independent Community Bankers of America filed a lawsuit. It alleged crypto companies had an advantage because they were not subject to the same regulatory requirements.
The OCCâs campaign could reshape competition in the stablecoin sector. Community banks have traditionally focused on local lending and deposits. Their entry into digital assets would mark a significant strategic shift.
The GENIUS Actâs January implementation will test the OCCâs approach. Community banks must decide whether to apply as issuers or subsidiaries. The outcome could determine whether stablecoins remain dominated by crypto firms or gain broader banking participation.
