U.S. Treasury Launches Stablecoin Consultation Under New GENIUS Act

The U.S. Treasury has launched a public consultation under the newly enacted GENIUS Act, signed into law by President Donald Trump in July 2025. The legislation marks the first federal regulatory framework for stablecoins, requiring that they be fully backed by U.S. dollars or similar liquid assets. Issuers with a market capitalization exceeding $50 billion are mandated to undergo annual audits, while the law also introduces new guidelines for stablecoins issued outside U.S. borders. The Treasury is required to collect and present public feedback to the Senate Banking Committee and the House Financial Services Committee [1].

As part of the broader regulatory initiative, the Treasury is soliciting public input on innovative methods to detect illicit activity in crypto markets. Suggestions include the use of artificial intelligence, blockchain monitoring, and digital identity verification. These tools aim to enhance the ability of financial institutions to identify and combat money laundering and other illegal activities. The public has until October 17 to submit comments, which could shape the future direction of U.S. digital asset regulation [1].

Treasury Secretary Scott Bessent has emphasized the potential benefits of stablecoins, stating that they could increase access to U.S. dollars for billions of people and boost demand for U.S. Treasury bonds. He described this as a “triple win” for stablecoin users, issuers, and the Treasury [1]. The bipartisan passage of the GENIUS Act has, however, sparked debate over potential risks, such as fraud and tax evasion. Broader concerns have also been raised about liquidity and systemic implications of government-backed stablecoins [2].

Criticism has emerged from outside the U.S., with Bank of England Governor Klaas Knot expressing disagreement with the Trump administration’s approach, particularly concerning the regulatory framework for stablecoins issued by commercial banks. His comments underscore a divergence in global regulatory perspectives on digital assets [3].

The law, which took effect in July, has been hailed as a “crypto win” following its signing on July 18. It has generated public debate over the balance between fostering innovation and ensuring adequate oversight in the rapidly evolving digital asset space [5]. Analysts suggest the new regulations may influence the next wave of asset tokenization, as institutional investors seek clarity and stability in the market [8].

The U.S. Treasury is also exploring the adoption of advanced compliance methods to strengthen oversight in the digital asset sector. These efforts reflect a broader initiative to align regulatory frameworks with technological advancements reshaping financial markets [6].

Source:

[1] Trump's New Stablecoin Law Triggers Public Debate in the U.S. (https://coindoo.com/trumps-new-stablecoin-law-triggers-public-debate-in-the-u-s/)

[2] Government-backed stablecoins raise liquidity and systemic questions (https://cyprus-mail.com/2025/08/18/government-backed-stablecoins-raise-liquidity-and-systemic-questions)

[3] BOE Governor Bailey openly disagrees with Trump admin's (https://cryptorank.io/news/feed/e8dfc-boe-governor-bailey-disagrees-with-trump)

[5] Hard-line conservatives tank procedural vote over crypto (https://www.aol.com/hardline-conservatives-tank-procedural-vote-185401172.html)

[6] US Treasury opens public consultation on digital IDs in ... (https://tradersunion.com/news/cryptocurrency-news/show/440379-u-s-treasury-opens-public-consultation/)

[8] stablecoin: News & Updates - CryptoDnes EN (https://cryptodnes.bg/en/tag/stablecoin/)