OCC Calls on Local Banks to Become Issuers of Payment Stablecoins

The U.S. Office of the Comptroller of the Currency (OCC) has urged local banks to enter the market for payment stablecoins under its rules for the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act). In a post on X on Monday, the regulator stated that it "encourages the development of capabilities for issuing payment stablecoins in the local community banking sector," referring to the finalized rules under the GENIUS Act that it approved last week.

The Payment Stablecoins Act will come into effect in January. "Interested local banks are encouraged to consider applying to become an authorized issuer of payment stablecoins – either the bank itself or its subsidiary, if applicable," the regulator's statement reads.

The call comes amid opposition from many banking associations to the OCC's proposed rules on stablecoin yields: some argue that they contradict the intent of Congress behind GENIUS. If a sufficient number of local banks enter the stablecoin market, they could challenge the market share held by crypto companies and financial institutions.

Local banks are already suing the OCC over the regulator's approval of crypto companies' applications for licenses. Earlier this month, the Independent Community Bankers of America filed a lawsuit, claiming that crypto companies have gained an advantage over local banks because they are not subject to the same regulatory requirements.