The US Treasury is receiving opposing guidance on how to implement the GENIUS Act, which regulates stablecoin payments. Coinbase asked the department to limit a ban on stablecoin interest to issuers. Non-issuers, such as crypto platforms, should be allowed to offer interest, the company said, arguing this aligns with Congress’s intent.
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The GENIUS Act was signed into law in July. It is expected to take effect either 18 months after enactment or 120 days after federal regulators issue final rules, likely in late 2026 or January 2027.
BPI Pushes Treasury to Extend Stablecoin Interest Prohibition
At the same time, banking organizations led by the Bank Policy Institute urged the Treasury to extend the prohibition to non-issuers. In a joint announcement, BPI and partner groups called for a blanket ban on stablecoin interest payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, covering exchanges and related entities.
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The institute said the ban should apply whether payments come directly from an issuer or through affiliates or partners. BPI had previously warned that allowing stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term interest could lead to as much as $6.6 trillion in deposit outflows from traditional banks.
Coinbase Suggests Treating Stablecoins as Cash Equivalents
Coinbase noted that lawmakers intentionally excluded non-issuer third parties from the ban, as a broader prohibition would have hindered stablecoin market development. It added that the Treasury does not have authority to override Congress.
Coinbase also recommended excluding non-financial software, blockchain validators, and open-source protocols from the law. The company suggested treating payment stablecoins as cash equivalents for tax and accounting purposes.
