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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assets meet tradfi in London at the fmls25

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, covering exchanges and related
entities.

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 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.

This article was written by Tareq Sikder at www.financemagnates.com.



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