The U.S. Treasury has issued its first proposed rule under the GENIUS Act, opening a 60-day public comment period. The move begins formal implementation of federal stablecoin standards while clarifying how state-level oversight may apply.
The notice of proposed rulemaking outlines principles for determining whether state regulatory regimes meet the law’s “substantially similar” requirement. Under the GENIUS Act, stablecoin issuers with less than $10 billion in outstanding assets can opt for state supervision instead of federal oversight, provided those standards align.
How Will State And Federal Stablecoin Oversight Interact?
The proposal addresses a central tension in U.S. crypto regulation. Federal lawmakers set baseline requirements, but state-level frameworks remain deeply embedded in financial oversight. Treasury’s approach attempts to define equivalence without fully displacing existing state authority over money transmission and digital asset activity.
But, several areas remain unresolved. The GENIUS Act does not include clear guidance on yield-bearing stablecoins, which has become a sticking point in broader market structure negotiations. Compared with earlier comment requests issued in August and September, this proposal narrows focus to supervisory alignment rather than technical or tax considerations.
“The GENIUS Act directs Treasury to establish broad-based principles for determining whether a state-level regulatory regime is substantially similar,” the agency stated in its release.
The rulemaking marks the first concrete step in translating legislative language into enforceable standards.
Can a dual regulatory framework balance innovation with consistent oversight across jurisdictions? The next catalyst will come from industry responses during the comment period and how regulators refine definitions of equivalence before finalizing rules.
