View or download a PDF of the letter here
Americans for Financial Reform Education Fund (AFREF) joined the Center for Responsible Lending (CRL), the Consumer Federation of America (CFA), and Professor Arthur E. Wilmarth, Jr. in filing comments criticizing the Office of the Comptroller of the Currency’s (OCC) proposed rule implementing the so-called GENIUS Act, the crypto industry-drafted legislation passed last year that established an inadequate federal regulatory regime for crypto assets known as stablecoins.
The comment raises concerns about the rule’s failure to provide adequate protections for consumers, such as allowing stablecoin issuers to use loose rules to maintain stablecoin reserves including uninsured deposits and other assets prone to credit and stability risk concerns. The rule does not require stablecoin issuers to provide clear and concrete rules for the timely and affordable redemption of stablecoins by customers and does not address the GENIUS’s Act shoddy approach to protecting customers when a stablecoin issuer goes into bankruptcy.
Lastly, the comment identifies the bill and the rule fail to apply robust capital standards and other stability measures to stablecoin issuers, setting the stage for a potential federal bailout of stablecoin issuers, not unlike the bailout of the stablecoin issuer Circle after the failure of Silicon Valley Bank in 2023.