Key Points
- U.S. Treasury opens 60-day comment period on state stablecoin oversight under GENIUS Act.
- Proposal defines federal standards and $10 billion threshold for regulatory transition.
The U.S. Department of the Treasury has issued a notice of proposed rulemaking (NPRM) inviting public comment on how state-level stablecoin regulatory frameworks should comply with the GENIUS Act.
The law, signed in July 2025, establishes parameters for state and federal oversight of dollar-pegged stablecoins.
The NPRM provides a 60-day comment window, with submissions due in early June 2026 through the federal docket at regulations.gov.
The proposal comes as the total market capitalization of dollar-backed stablecoins nears $300 billion, underscoring the broader implications for financial markets.
Under the GENIUS Act, states may license and supervise stablecoin issuers with consolidated outstanding issuance below $10 billion.
However, state frameworks must not materially diverge from federal standards, and the Treasury is seeking input on how to define that threshold.
$10 Billion Threshold and Dual Regulatory Tracks
The statute establishes two regulatory pathways based on issuance size.
Issuers with less than $10 billion in outstanding stablecoins may remain under approved state supervision, while those exceeding that limit shift automatically to federal oversight.
This transition is triggered by statute rather than regulatory discretion, meaning that growth alone can change an issuer’s primary regulator.
Within the state pathway, the NPRM outlines mandatory federal baseline requirements that cannot be weakened.
These include one-to-one reserve backing in cash or high-quality liquid assets, monthly public disclosure, compliance with federal anti-money laundering and sanctions rules, and a ban on rehypothecation of reserve assets.
States may impose stricter rules in areas such as capital buffers, liquidity management, supervisory practices, enforcement mechanisms, and administrative procedures.
The Treasury states that state regimes must produce outcomes at least as protective as the federal framework to qualify.
A Treasury-led Stablecoin Certification Review Committee, with participation from federal banking agencies, will assess whether state frameworks meet the “substantial similarity” standard required for approval.
