U.S. Treasury Opens 60-Day Consultation on GENIUS Act Stablecoin Rules

TLDR

• The U.S. Treasury has launched a 60-day public consultation on stablecoin rules under the GENIUS Act.
• The proposal outlines how federal and state regulators will share oversight responsibilities for stablecoin issuers.
• Issuers with less than $10 billion in circulating stablecoins may operate under state supervision if standards match federal rules.
• The Treasury requires all stablecoin issuers to maintain full 1:1 reserve backing with cash or high-quality liquid assets.
• The proposal mandates monthly public disclosures to ensure transparency and accountability across jurisdictions.

The U.S. Treasury has opened a new federal 60-day consultation on proposed stablecoin oversight rules. The proposal outlines how federal and state authorities will supervise issuers under clearly defined responsibilities. Officials aim to clarify responsibilities as the formal implementation of the GENIUS Act officially begins.

GENIUS Act Sets Framework for State and Federal Oversight

The Treasury proposal allows licensed and qualified issuers with under $10 billion in circulation to seek state supervision. However, state frameworks must meet a “substantially similar” standard to existing federal regulations. Officials said the approach supports regulatory flexibility across the market while preserving overall national consistency. The department stated, “State regimes must deliver strict protections equal to current federal oversight standards.”

Issuers choosing state supervision must maintain strict and clear operational and reporting requirements. The proposal requires a full 1:1 reserve backing with approved cash or high-quality liquid assets. It also mandates regular monthly public disclosures to ensure transparency across all jurisdictions. Federal anti-money laundering and national sanctions compliance remains mandatory for all issuers.

Treasury Clarifies Compliance, Restrictions, and Ongoing Legislative Questions

The proposal firmly prohibits rehypothecation, preventing issuers from strictly reusing reserves for multiple obligations. Treasury officials emphasized that reserve protections will remain uniform and national across jurisdictions. State regulators may impose comprehensive and detailed standards covering liquidity thresholds and risk management. They may also enforce robust and strong oversight with supervisory enforcement mechanisms.

Regulators continue to effectively align the GENIUS framework with existing money transmission laws nationwide. Agencies are still determining which relevant authorities will oversee various market segments. Previous consultations addressed enhanced digital forensic tools, tax reporting, and technical data collection standards. Officials confirmed the official public comment period will remain open for a full 60 days.

President Donald Trump officially signed the GENIUS Act into law in July. The legislation formalized the federal approach to stablecoin oversight across the United States with national standards. Treasury officials stated the rules will guide ongoing implementation and regulatory coordination. They added, “The framework ensures clarity while maintaining strong financial safeguards.”

Discussions continue regarding the regulatory treatment of yield-bearing stablecoins under current pending legislation. Industry participants argue that such regulated products could offer higher consumer returns than traditional savings accounts. Banking groups have raised concerns about potential large deposit outflows from domestic regulated institutions. Lawmakers are reviewing these issues as work continues on the pending CLARITY market structure bill.

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