MUSD (MUSD)

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We @Consensys filed a comment letter with the @USOCC today on its GENIUS Act rulemaking focusing on issuers. We support the framework overall but flagged three places where the proposed rule could be tightened up to comport with what the statute authorizes and sound pro-innovation policy.

The GENIUS Act prohibits issuers from paying yield to holders, but the OCC extends this by regulation to independent distribution partners.  This is conduct Congress specifically declined to prohibit when it rejected amendments that would have done so. A distributor spending its own commercial revenues to offer user incentives is not a conduit for the issuer to pay yield from reserves, and the rule should reflect that distinction.

When a wallet user deposits a stablecoin into a DeFi lending protocol, the yield they earn comes from borrowers in that market, not from the stablecoin issuer. The GENIUS Act itself carves non-custodial software interfaces out of regulated intermediary status, and the final rule should confirm that facilitating user access to DeFi protocols does not make a wallet provider a "related third party" paying yield on the issuer's behalf.

The OCC's concern about multi-brand stablecoin issuance is an information problem with an information solution. Requiring disclosure of issuer identity and reserve pool structure addresses the concern directly, and pool segregation is available as a structural complement if disclosure alone proves insufficient. But OCC”s proposal to prohibit multi-brand issuance ends up foreclosing a distribution model the market has already demonstrated works and puts OCC-supervised issuers at a disadvantage relative to FDIC-supervised issuers who face no equivalent restriction.

The full letter is here: https://t.co/IvtuliKuqs