Law of Code #163 - TradFi's push on stablecoin regulation, J.W. Verrett's response
Dec 1, 2025
J.W. Verrett, an Associate Professor of Law at George Mason University and a critic of banking influence on crypto regulation, dives into the implications of the GENIUS Act. He discusses his rebuttal to banks' attempts to regulate stablecoins and clarifies why definitions of 'interest' and 'yield' matter. Verrett expresses concerns about the dangers of broad rules affecting DeFi and challenges banks' authority over newly created assets. Plus, he sheds light on the significance of privacy tech like Zcash and what the future might hold for stablecoin legislation.
AI Snips
Chapters
Transcript
Episode notes
Banks Seek Broad Stablecoin Control
- J.W. Verret pushed back against bank trade letters seeking broad prohibitions on stablecoin yield.
- He argued such prohibitions would harm DeFi and improperly extend bank regulators' reach.
Use Comments To Shape Rulemaking
- Submit public comments because agencies use them to shape regulations and to evaluate litigation risk.
- Explain likely legal vulnerabilities to deter agencies from drafting rules that will be struck down.
Interest Has Flexible Legal Meaning
- 'Interest' in banking law lacks a single universal definition and can include non-time-based payments.
- Courts (e.g., Smiley v. Citibank) have permitted a broad interpretation to include fees and related payments.