U.S. Treasury seeks public comment on state-level stablecoin regulatory framework…follow-up to the GENIUS Act

The U.S. Treasury has launched a public comment process to establish a state-level regulatory framework for stablecoin oversight.

According to Cointelegraph on the 1st (local time), the Treasury issued a Notice of Proposed Rulemaking (NPRM) regarding a stablecoin regulatory proposal under the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act).

The GENIUS Act allows state governments to have regulatory authority over stablecoins with a market capitalization below $10 billion, but only to the extent that the framework does not materially diverge from federal regulation.

The Treasury presented maintaining 1:1 reserves and monthly reporting requirements as core conditions for stablecoins. Reserve assets are limited to cash or highly liquid assets.

It also mandates compliance with anti-money laundering (AML) and sanctions rules and bans rehypothecation—reusing the same assets repeatedly.

States may introduce additional rules on liquidity, risk management and supervisory procedures, but regulations looser than federal standards are not permitted.

“The state regulatory framework must provide protections that are the same as or stronger than federal regulation,” the Treasury said.

The public comment period for the proposal is 60 days. If an issuer’s market capitalization exceeds $10 billion, it will automatically become subject to federal regulation.

The GENIUS Act took effect after President Donald Trump signed it in July last year. However, debate over interest-bearing stablecoins continues.

Some companies, including Coinbase, argue that interest-bearing stablecoins could offer competitiveness relative to traditional bank deposits. Banks, however, continue to oppose them, citing the risk of deposit outflows.