US OCC calls on community banks to become payment stablecoin issuers

The Office of the Comptroller of the Currency (OCC) has called on community banks to become issuers of payment stablecoins, as part of the regulatory framework for the GENIUS Act. This legislation, which is expected to come into effect in January, aims to encourage the development of payment stablecoin capabilities within the community banking sector.

In a recent post on social media platform X, the OCC emphasized its encouragement for community banks to apply for the permit to become a permitted payment stablecoin issuer, either individually or through a subsidiary. The push for community banks to enter the stablecoin market comes as various banking advocacy groups have voiced concerns over the OCC's proposed rules on stablecoin yield, arguing that these rules may not align with the congressional intent behind the GENIUS Act.

If a significant number of community banks were to participate in the stablecoin market, they could potentially challenge the market dominance of crypto companies and traditional financial institutions. Community banks have also been embroiled in legal disputes with the OCC, specifically regarding the regulator's approval of charter applications from crypto companies.

Earlier this month, the Independent Community Bankers of America filed a lawsuit against the OCC, alleging that crypto companies enjoyed an unfair advantage due to their exemption from certain regulatory requirements.