The U.S. Department of the Treasury on April 1, 2026 issued its first notice of proposed rulemaking to implement the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), an 87-page document seeking public comment on state-level stablecoin regulation. The proposed rule establishes principles for determining whether state regulatory regimes are substantially similar to federal frameworks, allowing payment stablecoin issuers with market caps under $10 billion to opt for state oversight instead of federal regulation. This follows an advance notice issued in September 2025 and represents a dual-track regulatory approach balancing federal standards with state flexibility. The public has 60 days from Federal Register publication to submit comments via www.regulations.gov.
Treasury's First GENIUS Act Rulemaking on State Regulation
- ▪The GENIUS Act stands for Guiding and Establishing National Innovation for U.S. Stablecoins
- ▪The U.S. Department of the Treasury issued an advance notice of proposed rulemaking in September 2025 seeking public comment on implementing the GENIUS Act
- ▪The U.S. Department of the Treasury issued a notice of proposed rulemaking on April 1, 2026 related to implementing the GENIUS Act
- ▪The Treasury Department's April 3, 2026 notice of proposed rulemaking on state-level stablecoin regimes followed earlier GENIUS Act implementation rules it proposed on September 19 and October 1, 2025.
State-Level Regulatory Framework Requirements and Thresholds
- ▪The GENIUS Act requires state-level regulatory regimes to be substantially similar to the federal regulatory framework for payment stablecoin issuers to opt for state regulation
- ▪The GENIUS Act requires the U.S. Department of the Treasury to use notice and comment rulemaking to establish principles for state-level regulatory regime similarity
- ▪The GENIUS Act directs the U.S. Department of the Treasury to establish broad-based principles for determining whether a state-level regulatory regime is substantially similar to the federal regulatory framework
- ▪Under the GENIUS Act, payment stablecoin issuers with consolidated total outstanding issuance of not more than $10,000,000,000 may opt for regulation under a state-level regulatory regime
Public Comment Process and Timeline
- ▪The U.S. Department of the Treasury welcomes comments on the GENIUS Act notice of proposed rulemaking from all interested stakeholders
- ▪Public comments on the GENIUS Act notice of proposed rulemaking will be publicly viewable at www.regulations.gov.
- ▪Members of the public have 60 days from publication in the Federal Register to submit comments on the GENIUS Act notice of proposed rulemaking
Perspective of Smaller stablecoin issuers
- ▪Payment stablecoin issuers below the $10 billion market cap threshold gain optionality between federal and state regulatory frameworks under the GENIUS Act
- ▪State-level regulatory regimes under the GENIUS Act may provide smaller payment stablecoin issuers with more tailored oversight than federal regulation
Perspective of State financial regulators
- ▪The GENIUS Act creates a pathway for states to regulate payment stablecoins within their jurisdictions subject to federal principles
- ▪State financial regulators must design payment stablecoin regulatory regimes that meet the U.S. Department of the Treasury's substantially similar standard to participate in GENIUS Act oversight
Perspective of Consumer protection advocates
- ▪State-level payment stablecoin regulation under the GENIUS Act could lead to varying consumer protection standards across different jurisdictions
- ▪The substantially similar requirement in the GENIUS Act aims to prevent a race to the bottom among state payment stablecoin regulatory regimes
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