The US Treasury Department has officially begun implementing the US Generating and Innovating Stablecoins (GENIUS) Act, issuing its first notice of proposed rulemaking (NPRM) and opening a 60-day public comment period.
The 87-page proposal describes how the Treasury Department will determine whether state-level stablecoin regulatory rules are “substantially similar” to the federal framework—a key limitation that allows small issuers to remain under federal supervision.
Under the GENIUS Act, stablecoin issuers offering less than $10 billion can opt for state-level regulation, as long as those rules meet or exceed government standards. The proposed legislation establishes broad principles to guide that determination, while leaving flexibility to states in areas such as licensing, oversight, and enforcement.
According to this document, the Ministry of Finance draws a clear distinction between “similar requirements” – such as withholding support and compliance with anti-money laundering – and “limited government requirements,” where local regulators retain discretion, including capital and risk management standards.
Notably, this proposal strengthens the state’s foundation especially in the rules and interpretations issued by the Office of the Comptroller of the Currency, which shows its main role in overseeing nonbank stablecoin issuers that switch to state supervision after crossing the $10 billion threshold.
The provision also clarifies that state agencies may override federal requirements, as long as they do not conflict with federal law or undermine overall comparability.
The progress of US crypto legislation
The NPRM marks the Treasury’s first formal step in translating the GENIUS Act — enacted in July 2025 — into an effective regulatory framework for payment stablecoins, with final regulations expected after the public comment period closes.
States would also be prevented from weakening core disclosure standards, where issuers are required to publish withholding reports at least monthly – consistent with state frequency requirements.
Naming restrictions will apply equally to both entities, preventing state-controlled issuers from using terms prohibited in stablecoin brands.
The proposal emphasizes that federal law remains the foundation, noting that any future legislation passed by Congress regulating stablecoin issuers will automatically apply to state-regulated firms unless otherwise stated.
The 2025 passage of the GENIUS Act marked a turning point in US crypto policy, establishing the first institutional framework for stablecoins and requiring full treasury support, AML compliance, and general disclosure.
The law is widely seen as legalizing dollar-backed stablecoins while strengthening US monetary dominance.
Since then, attention has shifted to implementation and enforcement. Treasury reports issued under the GENIUS Act expand monitoring tools, including measures to target illegal finance and crypto hybrids.
At the same time, disputes between banks and crypto companies, especially about whether stablecoins can provide a yield, have delayed broader market structure efforts.
Meanwhile, Congress is advancing related bills such as the Clarity Act to define the regulatory environment of the SEC and CFTC, signaling a broader push toward a comprehensive regulatory framework for digital assets.
