- The Treasury launched a formal rulemaking process under the GENIUS Act, focusing on stablecoin oversight and compliance.
- A 30-day public comment period is open, seeking input on sanctions, asset custody, tax treatment, and issuer restrictions.
- The move follows an earlier informal review and may shape the broader U.S. crypto regulatory framework going forward.
The U.S. Treasury Department has officially started the regulatory process for stablecoins, moving to implement the GENIUS Act. This follows the law’s passage earlier this year, marking the first major legislation targeting crypto assets. The department opened a brief comment period to gather public and industry input on several key areas related to stablecoin oversight. The move begins the structured rulemaking phase that could shape the future compliance environment for U.S. stablecoin issuers.
Advance Notice Opens One-Month Comment Period
On Friday, the Treasury issued an advance notice of proposed rulemaking. This is a preliminary step before drafting full regulations. The public comment window remains open until October 20. During this time, individuals, crypto firms, and financial institutions can submit feedback on questions posed by the department. The notice includes dozens of questions, seeking clarity on issues such as asset custody and foreign regulatory comparisons.
For example, one question asks if more guidance is needed on whether reserve assets must be held in custody. Another asks how U.S. regulations compare with stablecoin frameworks being developed overseas. The GENIUS Act assigns responsibilities across several federal agencies. The Treasury’s role includes addressing tax treatment, sanctions enforcement, and anti-money laundering safeguards.
The department is also examining how stablecoin issuers must comply with both federal and state-level oversight. Other areas under review include prohibitions on certain issuers and the need for further clarity around compliance obligations. The input gathered will help form the next phase of the regulatory proposal.
Focus on Illicit Activity Detection and Industry Feedback
The current action builds on an earlier informal effort launched last month. That effort sought insights into identifying illicit finance risks associated with stablecoins. The Treasury’s approach now shifts into a formal data collection phase, with regulatory development expected to follow.
The questions published aim to assess how effectively the GENIUS Act addresses risk while supporting innovation. Officials are also evaluating how other countries are building their own stablecoin frameworks to inform domestic policy choices. Also on Friday, JP Morgan issued a research note stating that the stablecoin market must expand to support further growth.
Without that expansion, the firm noted, new stablecoins could begin displacing existing ones. Meanwhile, lawmakers continue working on broader crypto legislation, including the Digital Asset Market Clarity Act. That bill has already passed in the House and is under discussion in the Senate. The GENIUS Act represents a major shift in crypto oversight. The Treasury’s latest step moves regulation from concept to construction.
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