Stablecoin

President Trump

The United States&nbsp;Department of the Treasury is taking a major step toward formalizing stablecoin regulation.
On April 1, it <a href="https://home.treasury.gov/news/press-releases/sb0428" rel="noopener noreferrer nofollow">announced</a> issuing its first proposed rule under the GENIUS Act and invited public input on how the framework should be implemented.
The GENIUS Act, short for Guiding and Establishing National Innovation for U.S. Stablecoins, is the first federal law to create a comprehensive regulatory framework for stablecoins in the U.S. President Trump signed it into law on July 18, 2025.&nbsp;
However, there is a key takeaway from the new proposal that would determine the oversight of stablecoin issuers.
<a href="https://www.thestreet.com/crypto/newsroom/wall-street-genius-act-stablecoin-market" rel="noopener noreferrer nofollow">Related: GENIUS Act Passage Sets Foundation for Stablecoin Market to Reach $2 Trillion by 2028</a>
<h2 id="treasury-outlines-path-for-state-level-oversight">Treasury outlines path for state-level oversight</h2>
At the center of the proposal is a provision allowing certain stablecoin issuers to operate under state-level regulatory regimes.&nbsp;
Specifically, issuers with less than $10 billion in total outstanding issuance may opt for state oversight, but only if those frameworks are deemed “substantially similar” to federal standards.
However, this flexibility comes with strict conditions. Treasury makes it clear that state regimes must not only be “substantially similar” to federal rules, but also <a href="https://home.treasury.gov/system/files/136/NPRM-GENIUS4c-Principles.pdf" rel="noopener noreferrer nofollow">“meet or exceed” federal standards.</a>
The framework introduces a two-tier system. Certain requirements, such as reserve backing, anti-money laundering compliance and sanctions rules, are classified as “uniform." This means states must follow them closely without material deviation.
Other areas, like capital requirements, allow some discretion, but only if outcomes remain as stringent as federal standards.
More importantly, federal law still applies across the board. State regimes cannot conflict with federal statutes, reinforcing that the GENIUS Act is designed to create consistency, not fragmentation. 
Even for issuers opting into state regulation, oversight does not stop at the state level. A federal body called the Stablecoin Certification Review Committee must approve any state framework, ensuring it aligns with national standards.
The proposal also outlines a growth trigger. Once a stablecoin issuer exceeds $10 billion in issuance, it is expected to transition toward federal supervision, typically under the Office of the Comptroller of the Currency.
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<h2 id="which-states-are-crypto-friendly">Which states are crypto-friendly?</h2>
Currently, states like Wyoming, Texas and New York have some of the most crypto-friendly regulations.&nbsp;
Since 2016, Wyoming has passed numerous pieces of crypto-linked legislation. Its&nbsp; <a href="https://wyomingbankingdivision.wyo.gov/banks-and-trust-companies/special-purpose-depository-institutions" rel="noopener noreferrer nofollow">Special Purpose Depository Institution</a> (SPDI) banking charter<a href="https://wyomingbankingdivision.wyo.gov/banks-and-trust-companies/special-purpose-depository-institutions" rel="noopener noreferrer nofollow">&nbsp;</a>provides a framework for custody services and other crypto-related products. It is also the first state to launch its own stablecoin.&nbsp;<a href="https://www.morganlewis.com/pubs/2025/09/the-genius-acts-stablecoin-regulatory-scheme-promotes-uniformity-but-may-fall-short" rel="noopener noreferrer nofollow"></a>
Texas has&nbsp;enacted the <a href="https://capitol.texas.gov/tlodocs/87R/billtext/pdf/HB04474I.pdf" rel="noopener noreferrer nofollow">Texas Virtual Currency Bill</a>, which legitimizes the use of virtual currency and provides clear guidelines for businesses. It also&nbsp;introduced bills to align its crypto tax and reserve statutes with GENIUS Act provisions, streamlining dual compliance.
New York is a slightly complicated picture. Its <a href="https://www.dfs.ny.gov/virtual_currency_businesses" rel="noopener noreferrer nofollow">BitLicense</a> is one of the most established crypto frameworks in the country, giving it credibility, but it comes with a cost. The BitLicense mandates comprehensive compliance measures, including KYC protocols, capital requirements, and regular reporting.
However, beyond them, some states have actively taken steps that are not so crypto-friendly. For instance,&nbsp;California announced that its <a href="https://dfpi.ca.gov/regulated-industries/digital-financial-assets/" rel="noopener noreferrer nofollow">Digital Financial Assets Law</a>, effective July 1, 2026, will require crypto companies to get a license from the Department of Financial Protection and Innovation, imposing strict requirements on stablecoin issuers with penalties of up to $100,000 per day for unlicensed activity.
<h2 id="public-input-to-shape-final-framework">Public input to shape final framework</h2>
The Treasury is calling on stakeholders across finance, crypto and regulatory sectors to weigh in. Comments will be accepted for 60 days following publication in the Federal Register, with submissions made publicly available.
The proposal builds on earlier consultations launched in September, suggesting that regulators are incorporating industry feedback as they refine the framework.
<a href="https://www.thestreet.com/crypto/policy/bvi-advisor-says-the-united-states-is-falling-behind-on-digital-asset-policy" rel="noopener noreferrer nofollow">Related: BVI advisor says the GENIUS Act is only the beginning</a>

Treasury unveils dual rules for stablecoin companies below $10B

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