Treasury Opens Door for Public Input on GENIUS Act

Key Takeaways

• Treasury’s Call for Input: Treasury issued an ANPRM on the GENIUS Act, with public comments due by October 20, 2025.
• New Federal Framework: The Act creates a comprehensive regulatory regime for payment stablecoins, aiming to encourage innovation while addressing consumer protection, financial stability, and illicit finance risks.
• Who Can Issue: Starting in 2028, only approved “permitted payment stablecoin issuers” (PPSIs) may issue stablecoins in the U.S., with strict reserve, transparency, and compliance requirements.
• Limits and Safeguards: The law prohibits misleading marketing suggesting government backing, bans interest on holdings, and imposes penalties for unauthorized issuance.
• Foreign Access: Treasury will assess whether foreign stablecoin regimes are “comparable” before allowing their tokens into the U.S. market.

Deep Dive

The U.S. Department of the Treasury is beginning the long process of translating the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into practice. On September 19, Treasury issued an Advance Notice of Proposed Rulemaking (ANPRM), inviting public comment on how the law should be implemented. The request is not about imposing new requirements just yet, it is the first opportunity for stakeholders and the broader public to weigh in on how the U.S. will regulate payment stablecoins in the years ahead.

Enacted in July, the GENIUS Act created a comprehensive framework for stablecoin oversight. Stablecoins, digital assets designed to hold a fixed value relative to the U.S. dollar or another reference, have grown into a critical piece of the digital asset ecosystem. The Act reflects Congress’s effort to harness the efficiency of stablecoin-based payments while addressing the consumer, financial stability, and national security risks that have long concerned regulators. Treasury now holds the pen for much of the rulemaking, charged with designing a regime that both encourages innovation and installs guardrails against abuse.

At its core, the Act restricts stablecoin issuance to “permitted payment stablecoin issuers” (PPSIs), beginning in 2028. These issuers must be formed in the United States and can take one of three forms, such as a subsidiary of an insured depository institution, a federally qualified issuer, or a state-qualified issuer whose oversight framework has been deemed “substantially similar” to federal standards. The law also contemplates the role of foreign issuers, allowing them into the U.S. market only if their home regulatory regime is determined by Treasury to be comparable. This is not a trivial threshold, the agency must weigh questions of reserve management, consumer protection, and compliance with sanctions and anti-money laundering requirements before extending recognition.

The Act also introduces strict limits on how stablecoins can be marketed and used. Issuers are prohibited from suggesting that their tokens carry U.S. government backing or legal tender status, and they cannot pay interest or yield to holders merely for keeping stablecoins on hand. To bolster confidence, they must maintain transparent reserves and publish monthly reports detailing composition, custody, and liquidity. Violations of these provisions can carry significant penalties, including multimillion-dollar fines and even prison terms for willful misconduct.

Treasury’s ANPRM reflects the sweeping scope of the law. It asks for input on how to define safe harbors for small-scale or emergency issuances, how to handle cross-border stablecoin activity, what role state-level oversight should play, and how to design AML and sanctions obligations that reflect the realities of digital asset markets. It also extends into tax treatment, insurance coverage, and accounting questions that could shape how stablecoins are integrated into the broader financial system.

This latest step builds on Treasury’s earlier request for comment, issued in August, which focused specifically on innovative methods for detecting illicit finance in the digital asset space. That consultation remains open until October 17, and the new ANPRM closes on October 20. Taken together, the two notices show how regulators are trying to map out both the technical mechanics and the policy guardrails for a market that straddles payments, banking, and crypto.

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