OBL Urges Treasury to Uphold Congressional Intent in Implementing the GENIUS Act

11/05/25

The Ohio Bankers League joined state banking associations across the country this week in submitting a formal comment letter to the U.S. Department of the Treasury on implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The OBL's letter strongly urges Treasury to maintain the Act's core intent-ensuring that payment stablecoins function as means of payment, not investment vehicles.

The OBL's comments emphasize that the Act's prohibition on interest or yield payments for payment stablecoins is essential to protecting the stability of the traditional banking system and preventing the kind of speculative activity that could siphon deposits away from community banks. Without clear, broad enforcement of this prohibition, digital asset platforms could exploit loopholes to offer yield-style rewards that undermine the law's purpose and distort the market for insured deposits.

Community banks, which provide critical credit to small businesses, farmers, and families, are particularly exposed to potential disintermediation from interest-bearing stablecoins. As the OBL noted, even modest shifts in deposits could translate to significant reductions in local lending capacity-harming the communities that banks serve every day.

To uphold congressional intent, the OBL urged Treasury to:

• Define "interest or yield" broadly to include any economic benefit, regardless of its label.
• Prevent evasion through affiliates or third-party partners, ensuring indirect payments are treated as issuer payments.
• Avoid narrow interpretations of "solely," so that any benefit tied to holding a payment stablecoin would trigger the prohibition.

"The digital assets landscape is evolving rapidly, and thoughtful, balanced rulemaking is needed to ensure it develops in a way that supports-not disrupts-the broader financial system," the OBL wrote. The OBL extends its sincere thanks to the more than 50 Ohio bankers who took the time to submit their own regulatory comment letters on this important issue. Their engagement helps ensure that the voices of Ohio's community banks are heard loud and clear in Washington as Treasury finalizes these critical rules.

Read the letter here.