Treasury Genius Rulemaking: 87-Page Proposal Unveiled

The U.S. Department of the Treasury has launched its first notice of proposed rulemaking (NPRM) under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, releasing an 87-page proposal. The Treasury Genius rulemaking outlines how the Treasury will determine whether state-level stablecoin regulatory regimes are substantially similar to the federal framework.

GENIUS Act Overview

The GENIUS Act, enacted in July 2025, established the first federal framework for stablecoins, requiring full reserve backing, AML compliance, and regular disclosures. The law is widely seen as legitimizing dollar-backed stablecoins while reinforcing U.S. monetary dominance. 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.

Key Components of the Proposal

The proposed rule establishes broad principles to guide the determination of substantially similar state-level regulatory regimes, while leaving states flexibility in areas like licensing, supervision, and enforcement. 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.

Uniform Requirements

• Reserve backing
• Anti-money laundering compliance

State-Calibrated Requirements

• Capital standards
• Risk management standards

Implementation and Next Steps

The NPRM marks Treasury’s first formal step in translating the GENIUS Act into an operational regulatory regime for payment stablecoins, with final rules expected after the public comment period closes. The proposal anchors the federal benchmark largely to rules and interpretations issued by the Office of the Comptroller of the Currency, signaling its central role in overseeing nonbank stablecoin issuers that transition to federal supervision after crossing the $10 billion threshold.

Key Takeaways

• The Treasury has released an 87-page proposal outlining the guidelines for determining substantially similar state-level regulatory regimes 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 the determination of substantially similar state-level regulatory regimes, while leaving states flexibility in areas like licensing, supervision, and enforcement.
• The final rules are expected to be released after the public comment period closes.

Frequently Asked Questions

What is the purpose of the GENIUS Act?

The GENIUS Act aims to establish a federal framework for stablecoins, requiring full reserve backing, AML compliance, and regular disclosures.

How will the Treasury determine substantially similar state-level regulatory regimes?

The Treasury will determine substantially similar state-level regulatory regimes based on the proposed rule, which establishes broad principles to guide the determination, while leaving states flexibility in areas like licensing, supervision, and enforcement.