Support for Stablecoin Legislation and Leadership Confirmations

While the House and Senate were out of session for the last two weeks, federal financial regulators and legislators took a wide range of actions impacting the future of digital asset policy. Senate Banking Chair Tim Scott (R-SC) released two fact sheets on the GENIUS Act’s consumer protection and national security implications for stablecoins. Federal Reserve Chair Jerome Powell publicly endorsed the push for congressional stablecoin legislation, and Acting Comptroller of the Currency Rodney Hood reaffirmed support for responsible digital asset innovation as part of the OCC’s broader modernization agenda.

Meanwhile, Paul Atkins was sworn in as SEC chair, signaling a return to a more market-oriented regulatory posture, and the CFPB announced a shift in enforcement and supervision strategy.

Chairman Tim Scott Releases GENIUS Act Fact Sheets

• On April 16, Senate Banking Committee Chairman Tim Scott (R-SC) released a fact sheet detailing key consumer protection provisions in the GENIUS Act and a fact sheet related to national security. The GENIUS Act passed out of the Senate banking committee last month and is awaiting approval by the Senate. Below are summaries of the two fact sheets.
• Key consumer protection features include:
  • Robust Reserve Requirements. Stablecoin issuers must maintain reserves backing 100 percent of issued stablecoins with U.S. dollars, short-term Treasurys or similarly liquid assets. Issuers with over $50 billion in market capitalization must provide monthly reserve composition disclosures and annual audited financial statements.
  • Strict Marketing Standards. The bill prohibits stablecoin advertising that misrepresents tokens as being backed by the full faith and credit of the U.S., FDIC-insured or legal tender. Marketing must not mislead consumers into believing a stablecoin is issued, guaranteed or approved by the federal government.
  • Run and Volatility Protections. The bill establishes safeguards against destabilizing redemptions through requirements for reserve diversification, interest rate risk management, and capital and liquidity standards. It prohibits the use of high-risk reserve assets, such as corporate debt and equities.
  • Regulatory Oversight. Larger state-regulated issuers must be overseen by a primary federal payment stablecoin regulator in addition to their state regulator, seek a waiver to be exempt from federal oversight or halt new issuance once they surpass the $10 billion threshold.
  • Insolvency Protections. In the event of insolvency, the bill prioritizes the claims of stablecoin holders over all other creditors and requires expedited court review and distribution of reserves.
• Key national security features include:
  • Sanctions Compliance. The bill designates payment stablecoin issuers as financial institutions under the Bank Secrecy Act, requiring them to implement AML and sanctions programs, retain transaction records, monitor and report suspicious activity and conduct customer due diligence.
  • Freezing Authority. Issuers must maintain technical capabilities to freeze, block or burn tokens in compliance with lawful government orders. Foreign issuers participating in U.S. markets must also comply, or risk designation as noncompliant by the Treasury Department.
  • Treasury Coordination. The bill enhances the Treasury Department’s ability to enforce sanctions, requiring coordination with permitted issuers prior to blocking transactions involving foreign entities where feasible.

Federal Reserve Chair Signals Openness to Stablecoin Legislation

• On April 16, Federal Reserve Chair Jerome Powell voiced support for congressional efforts to establish a legal framework for payment stablecoins. Speaking at the Economic Club of Chicago, Powell noted that both the House and Senate are actively considering legislation, calling the development a good idea while acknowledging the lack of a framework at the federal level.
• Powell emphasized the importance of consumer protections and transparency in any future stablecoin legislation, describing stablecoins as digital assets that could have wide appeal.
• He also acknowledged that regulators have historically taken a conservative approach to crypto-related banking activities but suggested that a more flexible posture may be on the horizon, in a way that preserves safety and soundness but permits and fosters innovation.

Acting Comptroller Rodney Hood Outlines Strategic Priorities

• On April 16, Acting Comptroller Rodney E. Hood outlined four strategic priorities for the Office of the Comptroller of the Currency (OCC), emphasizing the agency’s commitment to modernizing the federal banking system while preserving its safety, soundness and integrity.
• Key highlights included:
  • Enabling Responsible Digital Asset Activities. Hood reaffirmed the OCC’s support for responsible innovation in the digital asset space. He pointed to Interpretive Letter 1183, which confirms that national banks may engage in certain digital asset activities, provided they do so safely and soundly and under appropriate risk management standards.
  • Supporting Bank-Fintech Partnerships. Hood stated that financial technology, when deployed responsibly, can broaden access, enhance efficiency and deepen relationships between banks and their customers. He cited the OCC’s Office of Financial Technology, which provides support for bank-fintech partnerships, including through regulatory sandboxes and virtual office hours.
  • Reducing Regulatory Burdens. Hood stated that regulatory frameworks must protect the public interest while allowing banks to innovate. He reaffirmed the OCC’s commitment to tailoring supervision based on each bank’s size, complexity, business model and risk profile.
  • Promoting Financial Inclusion. Hood noted that too many Americans lack access to fair, affordable financial services and remain vulnerable to predatory practices. He highlighted the OCC’s Roundtable for Economic Access and Change as a key initiative convening stakeholders from banking, civil rights, community development and technology sectors to promote equitable access to financial opportunity.

Paul Atkins Sworn in as SEC Chair

• On April 21, Paul Atkins was sworn into office as the 34th chairman of the Securities and Exchange Commission. In a statement, Atkins stated: “As I return to the SEC, I am pleased to join with my fellow Commissioners and the agency’s dedicated professionals to advance its mission to facilitate capital formation; maintain fair, orderly, and efficient markets; and protect investors.”
• Newly sworn-in SEC Chair Paul Atkins stated that a top priority will be to provide a firm regulatory foundation for digital assets through a “rational, coherent and principled approach.” Atkins spoke at a swearing-in ceremony in the Oval Office alongside President Donald Trump and Treasury Secretary Scott Bessent.
• Atkins was nominated by President Trump on January 20 and confirmed by the U.S. Senate on April 9. Prior to returning to the SEC, he served as the CEO of Patomak Global Partners, a global advisory firm he founded in 2009. He helped lead efforts to develop best practices for the digital asset sector and served as an independent director and nonexecutive chairman of the board of BATS Global Markets, Inc. from 2012 to 2015. Atkins is also the co-founder of the Token Alliance at The Digital Chamber and an advisory board member.
• Atkins was appointed by President George W. Bush to serve as a commissioner of the SEC from 2002 to 2008. During his tenure, he advocated for transparency, consistency and the use of cost-benefit analysis at the agency.

CFPB Shifts Supervisory Priorities

• On April 16, CFPB Chief Legal Officer Mark Paoletta issued a CFPB staff memorandum outlining the agency’s supervision and enforcement priorities.
• The CFPB stated: “To avoid the ever-increasing number of supervisory exams, which are multiplying the cost of running businesses and raising consumer prices, Supervision shall decrease the overall number of ‘events’ by 50% … Supervision should focus on collaborative efforts with the supervised entities to resolve problems so that there are measurable benefits to consumers.”
• The bureau will “deprioritize … [d]igital payments.”
• The agency will focus its resources on “pressing threats to consumers, particularly service members, their families, and veterans.”
• As part of this shift, the CFPB intends to prioritize oversight of depository institutions, scaling back its supervision of nondepository institutions, such as fintech firms and potentially digital asset companies.