Today the US Treasury issued an advance notice of proposed rulemaking related to the GENIUS Act for stablecoins, with responses requested within 30 days. The legislation delegated many rulemaking responsibilities to the Treasury Department. The topics covered are important ones, including exploring any subtleties in the definition of a “payment stablecoin”, clarifying the ban on interest payment and establishing what features should make foreign stablecoins “comparable”.

Among these topics, the ban on interest payments is particularly contentious, because the text of the legislation only prevents payments by the issuer. This contrasts with EU regulations, which also ban payments by crypto service providers. Banks are concerned about crypto exchanges attracting deposits and have been lobbying to have this changed in the upcoming crypto market infrastructure bill.

The Treasury may be considering using regulations to narrow the scope, because it explicitly asks about “indirect payments”. Arguably, a payment of 4% ‘rewards’ on stablecoin holdings by a crypto exchange such as Coinbase is an indirect payment. Here’s the Treasury’s question:

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