US Treasury Starts GENIUS Act Rollout With Notice Of Proposed Rulemaking

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.

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. 

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. 

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 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. 

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.

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