Executive Letter: “Crypto Week” is Next Week in D.C.
By Rose Oswald Poels
WBA and its members have spent an increasing amount of time over the last few years discussing cryptocurrency and its impact on the banking industry and consumers with our congressional delegation during both in-district and Washington, D.C. meetings. Those conversations intensified this session with Rep. Bryan Steil (WI-01) becoming the Chair of the Digital Assets Subcommittee of the House of Financial Services. At a June 30 event for Rep. Steil, he discussed in detail his leadership of the STABLE Act bill, broader crypto industry regulation, and the likely path forward in the House. His forecast was confirmed late last week when the House Committee on Financial Services Chairman French Hill (AR-02), House Committee on Agriculture Chairman GT Thompson (PA-15), and House Leadership announced that the week of July 14 will be “Crypto Week.”
Next week, the U.S. House will consider the CLARITY Act, the Anti-CBDC Surveillance State Act, and the Senate’s GENIUS Act. Rep. Steil is quoted as saying the following in the House press release:
“The golden age of digital assets is here, and the U.S. will lead,” said Rep. Bryan Steil (WI-01). “Passing stablecoin and market structure legislation, alongside a CBDC ban, will ensure the U.S. wins the Web3 race. This package encourages the innovation and development of Web3 businesses here in the United States, protects consumers from fraud, and allows us to outcompete our adversaries, ensuring America dominates the future of blockchain technology.”
WBA’s advocacy focused on changes to stablecoin legislation that would protect the banking industry against disintermediation—for example, by requesting that stablecoin issuers be prohibited from holding Federal Reserve Master Accounts, barred from paying interest or other similar rewards on stablecoins, and requiried to comply with anti-money laundering rules. The GENIUS Act establishes a dual licensing system where nonbank issuers exceeding $10B in U.S. Dollars in outstanding issuance must obtain a specialized license from the OCC and will then be regulated by the OCC. Smaller nonbank issuers may opt for state or federal licensing. The Act also prohibits the payment of interest on stablecoins, requires issuers to comply with anti-money laundering rules, and clarifies that nothing in the Act expands or contracts current eligibility for master account access.
The CLARITY Act would establish regulatory jurisdiction over cryptocurrency at the federal level between the SEC and the CFTC. The CLARITY Act also establishes standards for reserve assets, operational risk, and supervisory oversight. At the same time, the OCC will be playing a role as more digital asset firms seek applications for a national trust bank charter. Currently, crypto platform Anchorage Digital is the only digital asset company with a national trust bank charter; however, both Circle and Ripple have also submitted applications.
WBA supports the Anti-CBDC Surveillance State Act, which would prohibit the Federal Reserve from issuing a CBDC directly to individuals.
All three bills are expected to pass the House next week. This action, assuming no amendments, will then send the GENIUS Act directly to the President’s desk as the bill already passed the Senate. The acceptance of stablecoins as a method of payment among U.S. citizens and the practical impact on the banking industry of stablecoins remain to be seen. WBA will continue to be a vocal advocate for the banking industry with legislators and the public reinforcing the critical role that the industry plays in the economy and the fundamental need for bank deposits to fill that role.
