Corporate Counsel Daily, Treasury seeks public comment on potential GENIUS Act regulations, (Sep 18, 2025)

By Suzanne Cosgrove

The GENIUS Act charges the Treasury, as well as various other federal agencies, with issuing regulations that encourage innovation in payment stablecoins and protect consumers.

In an advance notice of proposed rulemaking (ANPRM), the U.S. Treasury Department said it is seeking public comment on potential regulations related to the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act that it may put into effect. Comments on the ANPRM, which will be published in the Federal Register on September 19, must be received on or before Oct. 20, 2025.

The GENIUS Act, which was enacted on July 18, 2025, provides a framework for the federal regulation of payment stablecoins. It also asks federal agencies to fill out that outline by providing an appropriately tailored regime to protect consumers, mitigate potential illicit finance risks, and address financial stability risks.

Issuance limits. Under the Act, only permitted payment stablecoin issuers (PPSIs) may issue a payment stablecoin in the U.S., subject to certain exceptions. In addition, beginning July 18, 2028, digital asset service providers may not offer or sell a payment stablecoin to anyone in the U.S. unless the payment stablecoin is issued by a PPSI or issued by a foreign payment stablecoin issuer (FPSI) that meets certain requirements.

The GENIUS Act provides three primary categories of PPSIs, all of which must be formed in the U.S.: a subsidiary of an insured depository institution, a federal qualified payment stablecoin issuer, or a state qualified stablecoin issuer.

The Act instructs the Treasury to issue regulations implementing the requirement that PPSIs are “subject to all Federal laws applicable to a U.S. financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification and due diligence.” The Treasury also is charged with determining whether a foreign country’s regulatory and supervisory regime is comparable to the U.S. framework established by the GENIUS Act, which would allow certain FPSI-issued stablecoins to be offered or sold in the U.S.

In addition to the Treasury’s oversight, the Act assigns the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) with implementing capital and liquidity requirements applicable to PPSIs and establishing a process for the licensing, regulation, examination, and supervision of PPSIs, as well as associated regulations to govern depository institutions that hold stablecoin reserves or participate in payment stablecoin activities.

State-qualified payment stablecoin issuers (of payment stablecoins with consolidated total outstanding issuance of up to $10 billion) generally can opt for state regulation—as long as the state regime is similar to the federal regime and the Stablecoin Certification Review Committee (SCRC) has approved the state-level regulatory regime.

Range of comments sought. Through the ANPRM, the Treasury is seeking comment on issues related to regulatory clarity, prohibitions on certain issuances and marketing, Bank Secrecy Act (BSA) anti-money laundering (AML) and sanctions obligations, the balance of state-level oversight with federal oversight, comparable foreign regulatory and supervisory regimes, and tax issues.

The Treasury also is seeking comment on all aspects of the ANPRM and requests commenters to identify other issues that the Treasury should consider. Commenters are especially encouraged to identify areas where Treasury regulations may overlap with or directly implicate the regulations assigned to other state or federal agencies.

On Aug. 18, 2025, the Treasury issued a request for comment (RFC) relating to innovative methods, techniques, and strategies that financial institutions use, or have the potential to use, to detect illicit finance related to digital assets pursuant to Section 9 of the GENIUS Act (Request for Comment on Innovative Methods to Detect Illicit Activity Involving Digital Assets, 90 Fed. Reg. 40148). Comments submitted in response to that RFC should not be submitted in response to the latest ANPRM, the Treasury said.

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