Key Takeaways
As the 17th of October looms like a deadline-sized cloud, the U.S. Treasury opens a window of public commentary on stablecoin tracking. Meanwhile, the banking lobby scrambles to douse those pesky interest payments on payment stablecoins!
The U.S. Treasury has summoned the ghost of public opinion regarding the wild world of illicit stablecoin escapades, as the illustrious GENIUS Act has officially knocked at their door.
Isn’t it just like the government to ask for help right when time runs out? 😂
According to the Treasury’s proverbial crystal ball, this move is intended to measure the potency and price of groundbreaking tools designed to monitor those dastardly unlawful activities.
“Treasury will use public comments to inform research on the effectiveness, costs, privacy, and cybersecurity risks, and other considerations related to these tools.”
Mark your calendars, folks! The public can shower the Treasury with their wisdom until the 17th, paving the path for the GENIUS Act’s illustrious launch. 🎉
Balancing safety and innovation
Scott Bessent, Treasury Secretary and self-proclaimed captain of the digital seas, declared that implementing the Act is paramount for maintaining America’s “leadership in digital assets.” He went on to add,
“It’s a win-win-win for everyone involved: stablecoin users, stablecoin issuers, and the U.S. Treasury Department.”
Wouldn’t that just make you burst with joy? Additionally, it should tickle your funny bone to know that stablecoin issuers are about to become key buyers of U.S. Treasury bills-what an unexpected twist!
These T-bills will back their digital dollars-Tether even ranked as the 18th biggest buyer of T-bills in Q2, overtaking the mighty South Korea! Who knew? 🤯
But hold your horses! After the comment window has closed, the Treasury will conjure up the official guidelines under the GENIUS Act. 🧙♂️
These guidelines will not only incorporate public feedback but will also outline how firms should track stablecoin activity-because who doesn’t love a little regulation on that cocktail of finance?
There’s also a ‘lawful order’ provision tucked away in the Act that allows authorities to seize, burn, freeze, or otherwise meddle with stablecoin transfers based on a judge’s or regulator’s whim. Say what?! 🙈
As it stands, we might be dealing with a draft and guidance parade stretching into early 2026. According to Latham and Williams LLP, the GENIUS Act will kick in either 18 months post-enactment or 120 days after regulators send out the final guidelines-who doesn’t love a good waiting game? 🤷♂️
So, expect those final rules to dribble out by mid-2026, while the compliance police could start knocking in 2027. Just in time for the holiday season! 🎅🏻
Meanwhile, the banking lobby, through their enchanting powers at the Bank Policy Institute (BPI), recently implored Congress to latch up those naughty GENIUS Act ‘loopholes’ that let stablecoins pay interest.
Just imagine the horror! They claim this loophole could unleash a capital exodus worth over $6.6 trillion, throwing a wrench in banks’ lending adventures.
“Incentivizing a shift from bank deposits and money market funds to stablecoins would end up increasing lending costs and reducing loans to businesses and consumer households.”
So sit back, grab your popcorn, and watch the drama unfold-will those regulators whip up some hard-hitting rules against yield on payment stablecoins, or will we simply witness another comedy of errors? 🍿
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2025-08-20 02:06