Treasury Seeks Comments on Stablecoin Regulation

The Treasury Department requested public input on "questions relating to the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins Act" ("GENIUS Act").

The GENIUS Act, enacted in July 2025, established a federal framework for the issuance and oversight of payment stablecoins. Its goal was to balance innovation with safeguards for consumers, financial stability, and illicit finance risks. (See related coverage.) Treasury issued the advance notice of proposed rulemaking ("ANPRM") to gather input from stakeholders before proposing detailed regulations under the Act.

In the ANPRM, Treasury solicited feedback on:

• Stablecoin Issuers and Service Providers. Treasury asked how to define and regulate "permitted payment stablecoin issuers," including reserve and disclosure rules, bans on paying interest or yield, marketing limits on implying government backing or legal-tender status, and accounting for stablecoins issued outside this framework. Treasury also sought views on the scope of digital asset service providers, exemptions for peer-to-peer transfers, and possible safe harbors for limited activity.
• Illicit Finance and Compliance. Treasury requested input on how issuers and intermediaries should meet anti-money laundering, counter-terrorist financing, and sanctions obligations. Treasury asked about technical capabilities to block unlawful transactions, implement suspicious activity monitoring, and ensure foreign issuers can comply with lawful orders.
• Foreign Regimes and Cross-Border Issues. Treasury sought comment on how to determine whether foreign regulatory frameworks are "comparable" to U.S. standards. Treasury also asked how to evaluate interoperability with U.S. dollar stablecoins and what reciprocal arrangements may be needed.
• Taxation and Insurance. Treasury invited views on how payment stablecoins should be classified for federal income tax purposes and whether related guidance would be helpful. Treasury also asked how insurance markets may be affected, including whether insurers should be permitted to act as issuers or service providers.
• Economic Impacts. Treasury asked about the costs and benefits of compliance, the effects on innovation and competition, and the potential impact on demand for Treasury securities and other reserve assets. Treasury also requested data on how regulatory clarity might influence startup formation, venture capital investment, and product development.

Treasury noted that the ANPRM builds on its earlier request for comment on digital asset illicit finance risks, which remains open until October 17, 2025. (See previous coverage.)

The deadline for submission of comments is 30 days from the notice's publication in the Federal Register.