The US Treasury Department on Wednesday published a Notice of Proposed Rulemaking (NPRM) that launched the administration’s first formal effort to implement the GENIUS Act, the new federal law governing payment stablecoins that President Donald Trump signed last year.
The NPRM is Treasury’s initial regulatory proposal to give effect to the requirements of the law and to solicit public comment on how the Department intends to implement the law.
Proposed rules for the GENIUS Act
Under the GENIUS Act — officially the U.S. Stablecoins National Innovation Guidance and Establishment Act — the Treasury Department is tasked with establishing high-level principles, through notice-and-comment rulemaking, for evaluating whether a nation’s regulatory regime is “substantially similar” to the federal framework.
The section is 87 pages long Proposed rule It explains how federal and state authorities are expected to interact under the new system and identifies the issues on which Treasury is seeking input from stakeholders.
The Treasury Department’s proposal indicates that it expects states to look to federal guidance, including standards proposed by the Office of the Comptroller of the Currency (OCC), when determining how directive their rules should be.
The NPRM cites the OCC’s approach, which the OCC says is intended to be flexible and calibrated to the nature, scope, and risks posed by a permissible payment Stablecoin issuer activities.
The Treasury draft leaves room for states to adopt principles-based requirements, suggesting that state regulators would have discretion in designing standards for issuers eligible under the state system.
The ultimate impacts will depend on the specific content of each state’s regulatory regime, which the proposal predicts could vary significantly because the GENIUS Act gives states discretion in implementing their own policies. Frameworks.
The Treasury Project sets the timeline
The draft rule also sets out the transition timeline and market consequences set out in the statute. Once the GENIUS Act goes into effect, entities will be prohibited from issuing payment stablecoins in the United States unless they are licensed as payment stablecoin issuers.
Additionally, the law makes it illegal, effective July 18, 2028 Digital asset service providers To offer or sell unlicensed stablecoins to persons located in the United States.
To maintain a path of state option for small issuers, the law allows a state to license issuers of payment stablecoins with a consolidated total outstanding issuance of no more than $10 billion, but only if the state certifies that its regulatory regime closely resembles the federal framework.
Combined, tThe administration is seeking public input on the details of the proposal as it moves toward finalizing rules intended to implement the GENIUS Act’s structure of oversight, licensing, and consumer protection in the stablecoin market.
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