OCC Head Looks to Ease Bankers’ Concerns Over Stablecoins in Wake of GENIUS Act

In remarks to the American Bankers Association annual meeting in Charlotte, Gould urged community banks to view the digital assets as a tool to compete with national banks and Wall Street giants, rather than as an existential threat, according to Decrypt.

The ABA, the Bank Policy Institute and 50 state banking organizations wrote to Congress in August asking for changes to the GENIUS Act to close “several loopholes” they said could threaten the stability of the traditional financial system.

Among those were the lack of rules regarding arrangements between stablecoin issuers, such as major retailers, and affiliates or exchanges that could allow issuers to circumvent the law’s prohibition on paying interest on deposits.

“The result will be greater deposit flight risk, especially in times of stress, that will undermine credit creation throughout the economy,” the letter said.

The groups urged Congress to extend the prohibition on paying interest to “digital asset exchanges, brokers, dealers, and affiliated entities,” and to prevent non-financial firms from issuing stablecoins.

In his comments Monday, Gould downplayed the risk of capital outflows. Any significant deposit flight “would not happen in unnoticed fashion” and “would not happen overnight,” he told attendees. “If there were to be a material flight from the banking system, I would be taking action.”

Read more: Chinese Tech Firms Halt Stablecoin Plans Amid Beijing’s Regulatory Pushback

Elected officials would also be likely to intervene, he added.

Connecting payment stablecoins to community banks could provide an avenue to “break some of the dominance that exists right now among the very largest banks in the payment system in America,” Gould said. Part of his role as a top banking regulator, he added, is to ensure “there are ways for you to do this in a safe-and-sound manner.”

It would not be fair, Gould stressed, if only institutions with “risk management sophistication” and strong balance sheets could participate in new technologies. One of the goals of the GENIUS Act, he said, is to “open as many paths as possible,” for smaller institutions to participate and ensure their “long term viability and success.”

However, bankers concerns with stablecoins extend beyond regulations, Prarabdh Sharma, head of DeFi Partnerships at STBL, told Decrypt. “It’s about survival in a changing financial landscape.”

Even a 10% shift in deposits “could raise [banks] funding costs by 20–30 basis points, cutting into lending capacity and profitability,” Sharma said. He acknowledged, however, that banks could “adopt the same underlying blockchain rails [as stablecoins] to tokenize deposits, streamline payments, and issue regulated, interest-bearing digital dollars of their own.”

Several crypto firms, including Coinbase, Circle, Paxos, Ripple and Bridge, have applied to the OCC for federal banking charters to do just that in the wake of the GENIUS Act taking effect.

 The stablecoin market has grown from $205 billion at the beginning of 2025, to $302 billion by October, and is projected to exceed $360 billion by February 2026.