US Treasury proposes regulations for state-level stablecoin governance, emphasizing reserve requirements and anti-money laundering compliance.
The US Department of the Treasury issued a notice of proposed rulemaking on Wednesday, seeking public comments on regulations for state-level stablecoin governance frameworks under the GENIUS Act.
The GENIUS Act, signed into law in July, grants states authority to regulate stablecoins with a market capitalization below $10 billion, provided their rules align closely with federal policies.
Key Regulatory Requirements
Proposed regulations mandate that stablecoins maintain a 1:1 reserve backing with cash or high-quality equivalents and require monthly reporting to ensure transparency.
States must fully comply with federal anti-money laundering and sanctions policies, while prohibiting token rehypothecation to prevent misuse of assets.
States can implement their own rules on liquidity, reserves, and risk management, but only if these are more stringent than federal standards, ensuring at least as much protection.
The public has 60 days from the announcement to submit comments on the proposal. Stablecoin issuers exceeding $10 billion in market cap will fall under exclusive federal jurisdiction.
The GENIUS Act represents a landmark in crypto regulations, though uncertainty persists regarding yield-bearing stablecoins and their implications for congressional bills.
