Blockchain software firm Consensys has filed a comprehensive response to the Federal Deposit Insurance Corporation regarding its proposed stablecoin rules. The firm expressed some concerns over the possible interpretation and enforcement of the new rules under the GENIUS Act.
Consensys Releases Statement On FDIC Stablecoin Rules
The filing comes with a statement that follows a comment submitted to the OCC May 1. It is “bookended” by a comment the company submitted to the Treasury Department around state regulatory frameworks.
Together, the three submissions “reflect a coordinated position on the federal regulatory framework that will govern payment stablecoins for the next decade,” Consensys said.
Further, the company noted it has four areas in the FDIC proposal for which it would like to see changes. These include the restrictions on yields and third-party distributors.
Consensys has appeared to take issue with the proposed construction. The firm claims that it would go beyond the intent of the GENIUS Act to ban issuers from remunerating stablecoin holders.
“The proposed presumption reaches past the statute to capture commonplace commercial distribution arrangements, including ordinary brand licensing,” said the company. It also stated that the lawmakers had previously been contemplating extending the ban to outside parties but had dropped the amendments.
Concerns Around DeFi Access
The other part of the filing was about access to decentralized finance via non-custodial wallet software. Consensys stated that the GENIUS Act maintains the protections for self-custodial tools. Thus, they urged that wallet providers shouldn’t be considered to be intermediaries when users use them independently with DeFi protocols.
According to the filing, “when a user independently deploys stablecoins into a DeFi protocol and earns protocol-native yield, the wallet interface is not paying yield on behalf of the issuer.”
Consensys also recommended that regulators keep the supervisory flexibility rather than automatic penalties based on reserve, redemption or capital shortfalls. The company said that the forced measures might result in “cliff-edge dynamics” that would adversely impact stablecoin holders.
The last part of the filing focused on technical jargon and representations of crosschain stablecoins. It included Consensys’ request for “functional, technology-neutral definitions” of distributed ledgers and smart contracts.
In another regulatory update, the CLARITY Act is moving towards a Senate floor vote.
