Treasury Opens a State Path for Smaller Stablecoin Issuers

The Treasury Department proposed its first regulation to implement the stablecoin-focused GENIUS Act.

The notice of proposed rulemaking (NPRM) issued Wednesday (April 1) would establish principles for determining whether a state-level regulatory regime is substantially similar to the federal framework established under the GENIUS Act, Treasury said in a press release.

The establishment of such principles is required by the GENIUS Act, which says that payment stablecoin issuers with a consolidated total outstanding issuance of not more than $10 billion can opt to be regulated under a state-level regulatory regime, if that regime is substantially similar to the federal regulatory framework, according to the release.

Treasury will accept public comment on the NPRM for 60 days after its publication in the Federal Register, per the release.

This proposal builds on an advanced notice of proposed rulemaking (ANPRM) that Treasury issued in September 2025, which sought public comment on several matters related to implementation of the GENIUS Act, according to the release.

The GENIUS Act was signed into law by President Donald Trump in July 2025, making it the country’s first-ever piece of crypto legislation. PYMNTS reported at the time that the long-awaited policy framework could signal a new era for crypto in the United States, or at least for the stablecoins that the GENIUS Act was written to regulate.

Treasury issued a request for comment in August 2025 that focused on ways to detect illicit activity involving digital assets. It then issued an ANPRM in September 2025 inviting comments from a wide range of stakeholders on the implementation of the GENIUS Act.

“The GENIUS Act tasks Treasury with issuing regulations that encourage innovation in payment stablecoins while also providing an appropriately tailored regime to protect consumers, mitigate potential illicit finance risks and address financial stability risks,” the Department said in a September press release.

PYMNTS reported on Nov. 4, 2025, that as the deadline for public comment on the ANPRM neared, 333 comments had been posted, ranging from anonymous individual submissions to detailed responses by state regulators, financial institutions and payments firms. One of the common threads that emerged was that state regulators sought parity with federal agencies in enforcing standards.