OCC Chief Plays Down Stablecoin ‘Bank Run’ Fears

The highest US banking regulator dismissed fears that stablecoins might set off a sudden deposit disaster, urging neighborhood banks to view the digital belongings as instruments to compete with Wall Road giants fairly than existential threats.

Jonathan Gould, head of the Workplace of the Comptroller of the Monet, instructed attendees on the American Bankers Affiliation’s annual conference in Charlotte on Monday that any materials deposit flight “wouldn’t go unnoticed” and “wouldn’t occur in a single day.”

“If there was a fabric flight from the banking system, I’d take motion,” Gould mentioned, noting that “extremely elected officers” and commerce associations would additionally intervene.

His feedback come because the banking business has spent months demanding that Congress shut loopholes within the GENIUS Act, the nation’s first main legislation. secure foreign money laws that was signed into legislation in July.

Normal Chartered lately predicted that stablecoins might siphon $1 trillion in deposits from rising market banks inside three years, whereas a Treasury Division report mentioned stablecoins might set off as much as $6.6 trillion in U.S. deposits, relying on yield choices.

The sector continues to develop, with customers of the Myriad prediction market (launched by Declutter‘s father or mother firm Dastan) provides a 55% likelihood available on the market cap of all stablecoins exceeding $360 billion earlier than February 2026.

Federal banking businesses engaged on the GENIUS Act laws are “very conscious of the regulatory deadlines that Congress has given us,” he added.

Cost stablecoin connectivity “could possibly be a chance” for neighborhood banks to “break a few of the dominance that at the moment exists among the many very largest banks within the funds system in America,” Gould mentioned, emphasizing his position in making certain “there are methods to do that in a secure and sound means.”

“I do not assume that is truthful,” Gould mentioned of making an “unlevel enjoying area” through which solely establishments with “threat administration sophistication” or robust stability sheets can take part in new applied sciences, pledging to “open as many avenues as doable to your long-term viability and success.”

Banking teams warn of ‘loopholes within the legislation’

The American Bankers Affiliation, the Financial institution Coverage Institute and greater than 50 state banking teams wrote a letter to Congress in August demanding that “a number of loopholes” be closed.

The banking teams urged Congress to increase the rate of interest ban to “digital asset exchanges, brokers, sellers and associates” and referred to as for scrapping the approval pathway that permits non-financial firms to situation stablecoins.

“Banks’ issues about stablecoins aren’t nearly regulation – it is about survival in a altering monetary panorama,” Prarabdh Sharma, DeFi Partnerships at STBL, instructed me. Declutter. “Even a ten% shift might enhance their borrowing prices by 20 to 30 foundation factors, lowering lending capability and profitability.”

Nonetheless, Prarabdh famous that the shift presents alternatives as banks can “use the identical underlying blockchain rails to tokenize deposits, streamline funds and self-issue regulated, interest-bearing digital {dollars}.”

Bridge utilized for an OCC nationwide belief constitution in October, following Coinbase, Circle, Paxos and Ripple.

Anchorage Digital turned the primary digital asset agency to obtain an OCC constitution in 2021, though it operated underneath a consent order till August, when the OCC terminated the order, citing the financial institution had achieved “compliance” with security and soundness necessities.