U.S. Treasury Opens Public Comment on GENIUS Act Stablecoin Rules

The U.S. is formally ushering in a new era of stablecoin regulation as federal authorities move to enforce the GENIUS Act and tighten oversight across the industry.

Summary:

The Treasury has formally begun enforcing the GENIUS Act through new proposed rules.
The framework tightens oversight on reserves, licensing and stablecoin business models.
It signals a decisive shift toward mandatory federal compliance across the industry.

The U.S. Treasury has taken its first major step toward enforcing the GENIUS Act, publishing a Notice of Proposed Rulemaking (NPRM) on April 1 that shifts stablecoin oversight from a largely voluntary framework to a binding federal regime. The move operationalizes legislation passed in July 2025, marking the beginning of a new compliance era for dollar-backed digital assets.

From Framework to Enforcement

The GENIUS Act short for Guiding and Establishing National Innovation for U.S. Stablecoins – has been positioned as the foundation of Washington’s digital asset strategy. But until now, much of the industry has operated in a gray zone between state-level supervision and evolving federal expectations.

The NPRM lays out the technical standards and supervisory thresholds that issuers must meet, effectively turning high-level legislation into enforceable rules. Once finalized, the framework will require stablecoin issuers to align with federal definitions of reserves, disclosure, licensing and permissible business models.

State vs. Federal: The $10B Fault Line

One of the most closely watched elements of the proposal is the $10 billion issuance threshold, which determines whether a stablecoin issuer can remain under state supervision.

Under the rule, firms below that threshold may continue operating under state regulators – such as the New York State Department of Financial Services – but only if those regimes are deemed “substantially similar” to federal standards.

The Conference of State Bank Supervisors has raised concerns that the Treasury’s interpretation of “substantially similar” may be too restrictive, potentially forcing smaller issuers into federal oversight sooner than anticipated. For fintech firms, that shift could bring significantly higher compliance costs and operational hurdles.

No Yield Allowed: Closing the Stablecoin Loophole

Another central pillar of the GENIUS Act is its strict prohibition on interest-bearing stablecoins. Under Section 4(a)(11), issuers are barred from offering any form of yield to token holders – a provision aimed at preventing stablecoins from functioning as unregulated bank deposits.

The Treasury’s latest guidance goes further, making clear that indirect incentives – such as rewards programs, affiliate bonuses or staking-like mechanisms – will be treated as attempts to circumvent the law.

The clarification directly impacts offshore issuers and crypto-native platforms that have relied on yield-based incentives to attract users, signaling that such models will not be tolerated within the U.S. regulatory perimeter.

OCC Opens the Door With Limited Federal Charter

As the Treasury tightens rules, the Office of the Comptroller of the Currency is preparing to onboard issuers into the new system.
On March 27, the OCC confirmed it is ready to process applications for a Limited Federal Payment Stablecoin Charter – a new licensing category created under the GENIUS Act.

The charter allows non-bank entities such as Circle and Paxos to operate under federal supervision without obtaining a full commercial banking license.

Crucially, it also provides access to Federal Reserve payment rails, a long-sought advantage that could significantly improve settlement efficiency and liquidity management for compliant issuers.

Reserve Transparency Becomes Non-Negotiable

Perhaps the most transformative change lies in how reserves are monitored. Under the proposed rules, 1-to-1 backing is no longer a matter of issuer disclosure – it becomes a verifiable standard.

Issuers will be required to:

Publish daily breakdowns of reserve assets
Submit monthly third-party attestations to the Treasury
Hold reserves exclusively in high-quality liquid assets (HQLA)

The definition of HQLA has also been tightened, excluding certain forms of commercial paper that were previously common in stablecoin reserves. That effectively pushes issuers toward U.S. Treasuries and repo markets as the primary backing instruments.

For the industry, this represents a shift toward bank-like transparency requirements – without necessarily granting bank-like privileges.

Timeline to Full Enforcement

The rollout of the GENIUS Act will follow a structured timeline:

Notice of Proposed Rulemaking: April 1, 2026
Public Comment Deadline: May 31, 2026
Final Rules Issued: July 18, 2026
Full Enforcement: Around November 15, 2026

This phased approach gives issuers several months to adjust their business models, capital structures and compliance systems before the rules take full effect.

A Defining Shift for U.S. Stablecoins

The Treasury’s move signals that the U.S. is entering a new phase of digital asset regulation – one defined less by experimentation and more by standardization.

By drawing clear lines around reserves, yield and licensing, regulators are attempting to integrate stablecoins into the broader financial system without repeating past mistakes tied to loosely regulated private money.

The result may be a smaller, more consolidated market dominated by firms capable of meeting federal standards.

For stablecoin issuers, the message is clear: the era of flexible interpretation is ending. What replaces it is a system where compliance is not just expected – but enforced.

The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.

Author

Alexander Zdravkov

Reporter at CoinsPress

Alexander Zdravkov interessiert sich leidenschaftlich für Bedeutungsfragen. Er ist seit mehr als drei Jahren im Kryptobereich tätig und hat ein Auge dafür, aufkommende Trends in der Welt der digitalen Währungen aufzuspüren. Ob er nun tiefgreifende Analysen liefert oder tagesaktuell über alle Themen berichtet, sein tiefes Verständnis und seine Begeisterung für das, was er tut, macht ihn zu einer wertvollen Ergänzung für das CoinsPress-Team.