The filing bookends the comment filed with the OCC on May 1 on the parallel federal rulemaking, and is paired with a separate comment being filed with the Treasury Department on the substantial-similarity framework for state regulatory regimes. Together the three filings reflect a coordinated position on the federal regulatory framework that will govern payment stablecoins for the next decade. We have outlined four areas of the FDIC proposal that need refinement.
Yield prohibition and third-party distribution
The first submission concerns the proposed rebuttable presumption that extends the GENIUS Act's yield prohibition to "related third parties" of an issuer. Section 4(a)(11) of the GENIUS Act prohibits the issuer of a payment stablecoin from paying yield to holders. It does not prohibit independent distribution partners from offering user-facing benefits in connection with their own commercial operations. The proposed presumption reaches past the statute to capture commonplace commercial distribution arrangements, including ordinary brand licensing. Congress considered amendments that would have extended the prohibition to third parties and rejected them. The FDIC should not accomplish through regulation what Congress declined to do by legislation. As an alternative, we propose a four-condition standard, grounded in the common law of agency, that would isolate genuine evasion from ordinary commercial activity.
Non-custodial software and DeFi access
The second submission addresses non-custodial software interfaces that facilitate user access to independent DeFi protocols. The GENIUS Act expressly preserves the self-custodial software carve-out, and a substantial body of authority from FinCEN, federal courts, and international regulators confirms that non-custodial wallet software is not a regulated intermediary. The final rule should confirm that 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.
Supervisory discretion over mandatory consequences
The third submission urges the FDIC to maintain several points where its proposal is more workable than the OCC's, including permissive treatment of multi-brand issuance and discretionary supervisory responses to reserve, redemption, and capital shortfalls. Mandatory consequences create cliff-edge dynamics that harm holders. Supervisory discretion produces better outcomes.
Technology-neutral definitions and crosschain representations
The fourth submission concerns technical definitions and crosschain stablecoin representations. The final rule should adopt functional, technology-neutral definitions of distributed ledger and smart contract, and should address crosschain representations by reference to the legal character of the holder's claim rather than the technological mechanism used.
What comes next with the GENIUS Act
We view this filing, alongside our OCC and Treasury comments, as the start of a conversation with the federal banking agencies about getting the GENIUS Act rules right. The broader legislative context makes these early rulemaking choices particularly consequential. Read our comment letter to the FDIC in full.