The U.S. Treasury Department is taking significant strides in transforming the recently passed GENIUS Act into a comprehensive regulatory framework for stablecoins. The “advance notice of proposed rulemaking,” launched last Friday, signals the administration’s initial formal move to sculpt the law into tangible regulations. With this step, President Trump’s administration is inviting public and industry insights during a month-long comment period that concludes on October 20.
Gathering Input for Stablecoin Regulation
The Treasury is calling for detailed feedback on an array of complex issues crucial to the development of stablecoin regulations under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. This includes prohibitions on issuers, sanctions obligations, anti-money laundering compliance, and the interplay between state and federal oversight. Additionally, tax implications and the need for further industry clarity are on the agenda.
The notice is peppered with probing questions aimed at stakeholders. For example, the Treasury is seeking opinions on whether additional clarity is needed regarding the custodianship of reserve assets. Another key inquiry delves into international comparisons, asking if there are other foreign payment stablecoin regulatory regimes that could serve as models or warnings for the U.S. approach.
Balancing Act: National and International Considerations
The GENIUS Act has been heralded as a landmark piece of legislation for the crypto industry, representing a significant victory. However, its implementation comes with challenges. The Treasury’s responsibilities under the act are diverse, ranging from ensuring compliance with sanctions to delineating tax treatments and coordinating with foreign jurisdictions.
This initiative builds on a less formal effort announced last month to gather feedback specifically on detecting illicit activity within the crypto sphere. It’s clear that the administration is not just focused on domestic regulations but also on how these rules will interact with international frameworks.
Political and Economic Implications
The GENIUS Act’s passage marks a pivotal moment for the crypto industry, but it’s just the beginning. Lawmakers are now shifting their attention to broader legislative efforts aimed at setting rules for the entire digital asset market. This includes the Digital Asset Market Clarity Act, already approved by the House and now under consideration in the Senate.
The bipartisan push for clear, friendly regulations is driven by a desire to position the U.S. as a global leader in the crypto sector. Republicans in Congress, along with federal financial regulators, are eager to fulfill President Trump’s orders to fast-track these regulatory frameworks.
However, the road to comprehensive crypto regulation is fraught with challenges. There is a need to balance innovation with security, ensuring that the U.S. remains competitive while protecting consumers and the financial system from potential risks.
Industry Reactions and Future Prospects
The crypto industry has expressed cautious optimism about the Treasury’s latest move. While the GENIUS Act represents a significant milestone, the industry’s focus is now on the broader legislative landscape. Many stakeholders are eager to see how these regulations will evolve and what they will mean for the future of digital assets in the U.S.
On the economic front, JP Morgan released a research note highlighting the need for the overall crypto market to expand significantly to sustain growth in the stablecoin sector. The bank warned that without such expansion, new stablecoins might start cannibalizing each other, leading to market instability.
The Treasury’s current efforts are a step in the right direction, but they also underscore the complexity of regulating a fast-evolving industry like crypto. As the comment period progresses, it will be crucial for stakeholders to engage actively and provide insights that will shape the future of stablecoin regulation in the U.S.
Looking Ahead
With the comment window open until October 20, the Treasury Department is poised to gather a wealth of information that will inform the next stages of rulemaking. As the U.S. seeks to establish itself as a crypto hub, these regulations will play a critical role in defining the country’s position in the global digital economy.
The ongoing dialogue between government agencies, lawmakers, and the crypto industry will be essential in crafting regulations that foster innovation while ensuring security and compliance. As the regulatory landscape continues to unfold, all eyes will be on how the U.S. navigates these challenges and opportunities in the coming months.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
