GENIUS Act Implementation

DEPARTMENT OF THE TREASURY <CFR>12 CFR Chapter XV, 31 CFR Subtitles A and B</CFR> <DEPDOC>[TREAS-DO-2025-0037]</DEPDOC> <RIN>RIN 1505-ZA10</RIN> <SUBJECT>GENIUS Act Implementation</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of the Treasury. <HD SOURCE="HED">ACTION:</HD> Advance notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of the Treasury (Treasury) is issuing this advance notice of proposed rulemaking (ANPRM) to solicit public comment on questions relating to the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The GENIUS Act tasks Treasury (and various other federal agencies) with issuing regulations that encourage innovation in payment stablecoins while also providing an appropriately tailored regime to protect consumers, mitigate potential illicit finance risks, and address financial stability risks. Through this ANPRM, Treasury is seeking public comment on potential regulations that may be promulgated by Treasury, including regarding regulatory clarity, prohibitions on certain issuances and marketing, Bank Secrecy Act (BSA) anti-money laundering (AML) and sanctions obligations, the balance of state-level oversight with federal oversight, comparable foreign regulatory and supervisory regimes, and tax issues, among other things. Treasury is seeking comment on all aspects of the ANPRM from all interested parties and also requests commenters to identify other issues that Treasury should consider. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments on this ANPRM must be received on or before October 20, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Written comments may be submitted through one of two methods: • <E T="03">Electronic Submission:</E> Comments may be submitted electronically through the Federal Government eRulemaking portal at <E T="03">https://www.regulations.gov.</E> • <E T="03">Mail:</E> Send to U.S. Department of the Treasury, Attention: Office of General Counsel, 1500 Pennsylvania Avenue NW, Washington, DC 20220. We encourage comments to be submitted via <E T="03">https://www.regulations.gov.</E> All comments should be captioned with “GENIUS Act Implementation Comments.” Please include your name, organizational affiliation, address, email address, and telephone number in your comment. All comments received, including attachments and other supporting materials, will be part of the public record and subject to public disclosure. Do not submit any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Tian Huang and Shane Shannon, Counselors to the General Counsel; Christina Lee, Senior Counsel; Degi Altantuya, Frank Colleluori, Brendan Costello, Matan Neuman, Carol Rodrigues, and David Wertime, Attorney-Advisors, Office of the General Counsel, <E T="03">OGC_GeniusAct@Treasury.gov,</E> 202-622-0480, Department of the Treasury, 1500 Pennsylvania Ave. NW, Washington, DC 20220. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background and Authority</HD> The GENIUS Act, enacted on July 18, 2025, provides a comprehensive framework for the federal regulation of payment stablecoins. <SU>1</SU> <FTREF/> As defined in the GENIUS Act, a payment stablecoin is a digital asset  <SU>2</SU> <FTREF/> (i) that is, or is designed to be, used as a means of payment or settlement and (ii) the issuer of which is obligated to convert, redeem, or repurchase for a fixed amount of monetary value and represents or creates the reasonable expectation that it will maintain a stable value relative to a fixed amount of monetary value. <SU>3</SU> <FTREF/> U.S. dollar-denominated (USD) stablecoins seek to combine the accessibility and frictionless use of digital assets with the stability and benefits of a USD-based financial system. <SU>4</SU> <FTREF/> <FTNT> <SU>1</SU>  Public Law 119-27. </FTNT> <FTNT> <SU>2</SU>  The term “digital asset” means any digital representation of value that is recorded on a cryptographically secured distributed ledger. <E T="03">Id.</E> at sec. 2(6). </FTNT> <FTNT> <SU>3</SU>   <E T="03">See</E> section 2(22) of the GENIUS Act for the full definition of a payment stablecoin. National currencies, deposits (including deposits recorded using distributed ledger technology), and securities are not considered payment stablecoins. </FTNT> <FTNT> <SU>4</SU>   <E T="03">See generally</E> President's Working Group on Digital Asset Markets, Strengthening American Leadership in Digital Financial Technology (2025) at 88, <E T="03">https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf.</E> </FTNT> Under the GENIUS Act, only permitted payment stablecoin issuers (PPSIs) may issue a payment stablecoin in the United States, subject to certain exceptions and safe harbors. <SU>5</SU> <FTREF/> Further, beginning on July 18, 2028, digital asset service providers  <SU>6</SU> <FTREF/> may not offer or sell a payment stablecoin to any person in the United States unless the payment stablecoin is issued by a PPSI or issued by a foreign payment stablecoin issuer (FPSI) that meets certain requirements. <SU>7</SU> <FTREF/> The GENIUS Act provides three primary categories of PPSIs, all of which must be formed in the United States: (i) a subsidiary of an insured depository institution; (ii) a federal qualified payment stablecoin issuer; or (iii) a state qualified stablecoin issuer. <SU>8</SU> <FTREF/> <FTNT> <SU>5</SU>  Sec. 3(a), Public Law 119-27. </FTNT> <FTNT> <SU>6</SU>  The term “digital asset service provider” means a person that, for compensation or profit, engages in the business in the United States (including on behalf of customers or users in the United States) of (i) exchanging digital assets for monetary value; (ii) exchanging digital assets for other digital assets; (iii) transferring digital assets to a third party; (iv) acting as a digital asset custodian; or (v) participating in financial services relating to digital asset issuance. <E T="03">Id.</E> at sec. 2(7). </FTNT> <FTNT> <SU>7</SU>  An FPSI is defined as an issuer of a payment stablecoin that is organized under the laws of or domiciled in a foreign country, a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, and is not a PPSI. <E T="03">Id.</E> at sec. 2(12). <E T="03">See id.</E> at sec. 3(b) and 18. </FTNT> <FTNT> <SU>8</SU>   <E T="03">Id.</E> at sec. 2(23). </FTNT> The GENIUS Act vests Treasury with various authorities and responsibilities, including express authority to issue regulations to carry out the GENIUS Act. <SU>9</SU> <FTREF/> For example, Treasury is tasked with implementing limitations on the issuance of payment stablecoins in the United States, <SU>10</SU> <FTREF/> as well as issuing rules establishing broad-based principles for determining whether a state-level regulatory regime is substantially similar to the federal regulatory framework. <SU>11</SU> <FTREF/> The GENIUS Act calls on Treasury to issue regulations implementing the requirement that PPSIs are “subject to all Federal laws applicable to a U.S. financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification and due diligence.”  <SU>12</SU> <FTREF/> Treasury is also tasked with determining whether a foreign country's regulatory and supervisory regime is comparable to the U.S. framework established through the GENIUS Act, which would allow certain payment stablecoins issued by an FPSI to be offered or sold in the United States, subject to certain additional conditions. <SU>13</SU> <FTREF/> <FTNT> <SU>9</SU>   <E T="03">Id.</E> at sec. 13. </FTNT> <FTNT> <SU>10</SU>   <E T="03">Id.</E> at sec. 3(c)-(d). </FTNT> <FTNT> <SU>11</SU>   <E T="03">Id.</E> at sec. 4(c)(2). </FTNT> <FTNT> <SU>12</SU>   <E T="03">See, e.g., id.</E> at sec. 4(a)(5). </FTNT> <FTNT> <SU>13</SU>   <E T="03">See id.</E> at sec. 18(a)-(b). </FTNT> In addition, the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) (collectively, the Primary Federal Payment Stablecoin Regulators) are generally tasked with implementing capital and liquidity requirements applicable to PPSIs, <SU>14</SU> <FTREF/> and establishing a process and framework for the licensing, regulation, examination, and supervision of PPSIs, <SU>15</SU> <FTREF/> as well as associated regulations governing depository institutions that hold stablecoin reserves or otherwise participate in payment stablecoin activities, <SU>16</SU> <FTREF/> among other directives. <FTNT> <SU>14</SU>   <E T="03">See id.</E> at sec. 4(a)(4)(A). </FTNT> <FTNT> <SU>15</SU>   <E T="03">See, e.g., id.</E> at sec. 4(b); 4(h)(1); 5(a)(1)(B); 5(a)(2); 5(g). </FTNT> <FTNT> <SU>16</SU>   <E T="03">See, e.g., id.</E> at sec. 4(a)(1)(A)(ii); 4(a)(4)(C)(iv); 16. </FTNT> Under the GENIUS Act, the Secretary of the Treasury chairs the Stablecoin Certification Review Committee (SCRC), an interagency committee that also includes the Chair of the FRB (or the Vice Chair for Supervision, if delegated by the FRB Chair) and Chair of the FDIC. <SU>17</SU> <FTREF/> State qualified payment stablecoin issuers (of payment stablecoins with consolidated total outstanding issuance of up to $10 billion) generally may opt for state regulation so long as the state regime is substantially similar to the federal regi ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 37k characters. 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