OCC Chief Performs Down Stablecoin 'Financial institution Run' Fears – Decrypt

The highest banking regulator within the U.S. dismissed fears that stablecoins may set off a sudden deposit disaster, urging neighborhood banks to view the digital belongings as instruments for competing with Wall Avenue giants somewhat than existential threats.

Jonathan Gould, head of the Workplace of the Comptroller of the Forex, advised attendees on the American Bankers Affiliation Annual Conference in Charlotte on Monday that any materials deposit flight “wouldn’t occur in unnoticed trend” and “wouldn’t occur in a single day.”

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

His remarks come because the banking trade has spent months demanding Congress shut loopholes within the GENIUS Act, the nation’s first main stablecoin laws signed into regulation in July.

Commonplace Chartered not too long ago projected stablecoins may siphon $1 trillion in deposits from rising market banks inside three years, whereas a Treasury Division report estimated stablecoins may set off as much as $6.6 trillion in U.S. deposit flight relying on yield choices.

The sector continues to develop, with customers of prediction market Myriad (launched by Decrypt‘s guardian firm Dastan) putting a 55% probability available on the market cap of all stablecoins crossing $360 billion earlier than February 2026.

Federal banking businesses engaged on GENIUS Act rulemakings are “very acutely aware of the statutory deadlines that Congress has given us,” he added.

Cost stablecoin connectivity “is perhaps a risk” for neighborhood banks to “break a few of the dominance that exists proper now among the many very largest banks within the cost system in America,” Gould mentioned, emphasizing his function in making certain “there are methods so that you can do that in a safe-and-sound method.”

“I do not assume that is truthful,” Gould mentioned of making an “unlevel taking part in discipline” the place solely establishments with “threat administration sophistication” or robust steadiness sheets can take part in new applied sciences, pledging to open “as many paths as doable in your long-term viability and success.”

Banking teams warn of “loopholes”

The American Bankers Affiliation, Financial institution Coverage Institute, and over 50 state banking teams wrote to Congress in August demanding closure of “a number of loopholes” within the GENIUS Act.

The banking teams urged Congress to increase the curiosity prohibition to “digital asset exchanges, brokers, sellers, and affiliated entities” and referred to as for eradicating the approval pathway that lets non-financial companies situation stablecoins.

“Banks’ concern with stablecoins is not nearly regulation—it is about survival in a altering monetary panorama,” Prarabdh Sharma, DeFi Partnerships at STBL, advised Decrypt. “Even a ten% shift may elevate their funding prices by 20–30 foundation factors, reducing into lending capability and profitability.”

Nonetheless, Prarabdh famous the shift opens alternatives, as banks can “undertake the identical underlying blockchain rails to tokenize deposits, streamline funds, and situation regulated, interest-bearing digital {dollars} of their very own.”

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, although it operated underneath a consent order till August, when the OCC terminated the order, citing the financial institution had reached “compliance” with security and soundness necessities.