U.S. Treasury Launches GENIUS Act Rulemaking
The U.S. Department of the Treasury has formally begun implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, releasing its first notice of proposed rulemaking (NPRM) and opening a 60-day public comment period. The 87-page proposal outlines how the Treasury will determine whether state-level stablecoin regulatory regimes are 'substantially similar' to the federal framework—a key threshold allowing smaller issuers to remain under state supervision.
Under the GENIUS Act, stablecoin issuers with less than $10 billion in outstanding supply can opt for state-level regulation, provided those regimes meet or exceed federal standards. The proposed rule establishes broad principles to guide that determination, while leaving states flexibility in areas like licensing, supervision, and enforcement. According to the document, the Treasury draws a clear distinction between 'uniform requirements' — such as reserve backing and anti-money laundering compliance — and 'state-calibrated requirements,' where local regulators retain discretion, including capital and risk management standards.
Notably, the proposal anchors the federal benchmark largely to rules and interpretations issued by the Office of the Comptroller of the Currency (OCC), signaling its central role in overseeing nonbank stablecoin issuers that transition to federal supervision after crossing the $10 billion threshold. The rule also clarifies that state frameworks may exceed federal requirements, so long as they do not conflict with federal law or undermine overall comparability.
Core Provisions: Two Paths for Stablecoin Issuers
The proposal establishes two regulatory paths: issuers with less than $10 billion in outstanding supply may remain at the state level, subject to a 'substantial similarity' assessment; those exceeding the threshold or opting for federal supervision fall under OCC oversight. Regardless of the path, all issuers must comply with uniform core disclosure standards, including monthly reserve composition reports, AML compliance, and naming restrictions that prevent prohibited brand terminology. State regimes are barred from weakening these standards.
The proposal underscores that federal law remains the baseline, noting that any future legislation passed by Congress governing stablecoin issuers would automatically apply to state-regulated firms unless explicitly stated otherwise. This ensures regulatory consistency and prevents states from attracting issuers through lenient standards.
U.S. Crypto Legislation Progress
The NPRM marks Treasury’s first formal step in translating the GENIUS Act — enacted in July 2025 — into an operational regulatory regime for payment stablecoins, with final rules expected after the public comment period closes. The passage of the GENIUS Act was a turning point in U.S. crypto policy, establishing the first federal framework for stablecoins with full reserve backing, AML compliance, and regular disclosures. It is widely seen as legitimizing dollar-backed stablecoins while reinforcing U.S. monetary dominance.
Since then, attention has shifted to implementation and follow-on legislation. Treasury reports under the GENIUS Act are expanding oversight tools, including measures targeting illicit finance and crypto mixers. At the same time, disputes between banks and crypto firms—especially over whether stablecoins can offer yield—have slowed broader market structure efforts. Meanwhile, Congress is advancing complementary bills like the Clarity Act to define SEC and CFTC jurisdiction, signaling a broader push toward a comprehensive regulatory framework for digital assets.