Amid Flurry of Policy Developments on Stablecoins, Master Accounts, and National Trust Charters, ICBA Urges a Pause

ICBA has been a leading voice in crypto policy for years, and our dedicated advocacy efforts have produced significant accomplishments, including the prohibition on stablecoin issuers paying yield, interest, or rewards under the GENIUS Act.

This advocacy has extended to our ongoing work on crypto market structure legislation to press lawmakers to curtail the ability of crypto intermediaries, in addition to stablecoin issuers, to pay yield or interest to payment stablecoin users on their platforms.

However, crypto policy has continued to expand into an amalgamation of issues—centering on payment stablecoins, access to Federal Reserve master accounts, and the Office of the Comptroller of the Currency’s national trust charters—that pose risks to the local communities that depend on community bank lending. In response, ICBA is now calling on policymakers to pause these crypto policy developments and holistically assess their combined impact on local communities and the broader economy.

A Trio of Key Policy Developments

In a new message to policymakers, ICBA breaks down the impact on community banks and the real economy of granting a novel financial product like cryptocurrency with direct master access to the nation’s central bank and an expanded national trust bank charter that removes important safeguards that apply to traditional banks.

While any one of these developments could lead to significant structural changes, their risks should not be assessed in isolation. The ongoing development of the stablecoin industry, the Fed’s granting master account access to the Kraken crypto entity while the agency considers a limited-purpose payment account prototype, and the OCC’s string of new national trust bank charters for digital asset entities are combining to pose a compounded threat to bank deposits and lending.

ICBA Advocacy Continues

This new message to policymakers is just the latest effort by ICBA and community bankers to address the risks posed by the multitude of issues stemming from the growth of the crypto sector. We have continuously worked to preserve master account access for the traditional banking sector, to oppose the OCC’s wholesale redefinition of its national trust charter, and to address the cybersecurity risks posed by crypto-related scams—including via meetings with OCC, FDIC, and Federal Reserve officials.

And while the legislative battle over digital assets market structure remains unresolved, we are encouraged by the outpouring of letters and calls from community bankers urging senators to support the ICBA-advocated limitation on stablecoin yield to maintain the vital role of community banks as the credit engines of the American economy.

Further, ICBA recognizes that the shifting landscape necessitates a concerted effort to educate bankers about digital assets. To that end, ICBA earlier this year delivered a five-part webinar series on the fundamentals of digital assets, and we continue working to offer community bankers the knowledge to navigate this new ecosystem.

Ongoing Engagement at a Critical Time

As regulators’ GENIUS Act rulemakings on payment stablecoin continue this year, ICBA is working diligently to help community bankers to understand the related risks and opportunities for our industry as regulators establish the full framework to operationalize these new payment instruments. As part of that effort, ICBA is providing technical support for its partner state associations as many states introduce new legislation to create pathways for state-regulated payment stablecoin issuers.

ICBA’s digital assets team will also continue its outreach to bankers with multiple in-person and virtual presentations scheduled this year. These speaking engagements offer bankers the opportunity to stay on top of rapidly changing market and regulatory conditions, provide insights that shape regulatory priorities, and share more of the knowledge they need to be effective advocates at the local level.

ICBA and community bankers have a long track record of success in Washington and in local communities across the nation. Amid a flurry of crypto-related advocacy challenges, we must continue working together to ensure our voices are heard loud and clear on behalf of the local communities our industry serves.

Charles Yi is ICBA senior executive vice president for government relations, and Brian Laverdure is ICBA senior vice president of digital assets and innovation policy.