The US Treasury on Wednesday published a notice of proposed rulemaking (NPRM) that launches the administration’s first formal effort to implement the GENIUS Act, the new federal law governing payment stablecoins that was signed by President Donald Trump last year.
The NPRM is the Treasury’s initial regulatory proposal to give effect to the statute’s requirements and solicits public comment on how the department intends to apply the law.
GENIUS Act’s Proposed Rules
Under the GENIUS Act — formally titled the Guiding and Establishing National Innovation for US Stablecoins Act — Treasury is charged with setting out, through notice-and-comment rulemaking, high-level principles for assessing whether a state regulatory regime is “substantially similar” to the federal framework.
The department’s 87-page proposed rule explains how it expects federal and state authorities to interact under the new regime and identifies matters on which Treasury seeks input from stakeholders.
Treasury’s proposal signals that it anticipates states will look to federal guidance, including standards the Office of the Comptroller of the Currency (OCC) has proposed, when deciding how prescriptive their own rules should be.
The NPRM cites the OCC’s approach, which the OCC says is intended to be flexible and calibrated to the nature, scope, and risks posed by a permitted payment stablecoin issuer’s activities.
Treasury’s draft leaves room for states to adopt principles-based requirements, indicating that state regulators will have discretion to design standards for issuers who qualify under a state regime.
The ultimate effects will depend on the specific content of each state’s regulatory regime, which the proposal anticipates could vary widely because the GENIUS Act grants states discretion in implementing their own frameworks.
Treasury Draft Sets Timeline
The draft rule also sets out the transition timeline and market consequences contemplated by the statute. Once the GENIUS Act takes effect, entities will be barred from issuing payment stablecoins in the United States unless they are authorized as permitted payment stablecoin issuers.
In addition, the statute makes it unlawful, beginning July 18, 2028, for digital asset service providers to offer or sell unlicensed stablecoins to persons located in the United States.
To preserve a state-option pathway for smaller issuers, the law allows a state to license payment stablecoin issuers with a consolidated total outstanding issuance of no more than $10 billion, but only if the state certifies that its regulatory regime is substantially similar to the federal framework.
Taken together, the department is seeking public input on the proposal’s details as it moves toward finalizing rules intended to implement the GENIUS Act’s structure for supervision, licensing, and consumer protections in the stablecoin market.
Featured image from OpenArt, chart from TradingView.com
