CFTC Allows Banks To Issue Payment Stablecoins

Stablecoins can now be issued by national bank charters in the U.S.

The CFTC (Commodities Future Trading Commission) has amended its stablecoin definition in letter 25-40 under the newly appointed head Michael Selig. Therein, it has been decided that national bank charters are also able to become issuers for payment stablecoins under certain activities.

Chairman Michael Selig made the announcement:

“During President Trump’s initial term, the Office of the Comptroller of the Currency made history by chartering the first national trust banks with authority to custody and issue payment stablecoins. These national trust banks continue to play an important role in the payment stablecoin ecosystem,”

“I’m pleased that the CFTC staff is amending its previously issued no-action letter to expand the list of eligible tokenized collateral to include payment stablecoins issued by these institutions. With the enactment of the GENIUS Act and the CFTC’s new eligible collateral framework, America is the global leader in payment stablecoin innovation.”

Further in the published document, the CFTC goes into detail about the different types of scenarios whereby both payment stablecoins and digital assets are actively accepted in collateral.

CFM notes that as part of this new framework, the GENIUS Act contemplates payment stablecoins issued by a permitted payment stablecoin issuer being eligible as cash or cash equivalent margin for FCMs, DCOs, broker-dealers, registered clearing agencies and swap dealers.

This is an important development while the White House continues to try and resolve the differences between the crypto industry and the banks lobby groups on paying stablecoin yields. After a meeting was scheduled last week to resolve key differences, little progress was made on the central issue.

Both sides are set to negotiate a better deal on Tuesday for a second time according to CryptoInAmerica.