Treasury Seeks Input on Stablecoin Framework: Innovation vs. Financial Stability

The U.S. Department of the Treasury has initiated a public comment period through an Advance Notice of Proposed Rulemaking (ANPRM) to gather input on implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a landmark piece of legislation aimed at regulating the stablecoin sector. The GENIUS Act, enacted on July 18, 2025, establishes a comprehensive framework for federal oversight of payment stablecoins, balancing innovation with consumer protection, financial stability, and anti-money laundering (AML) safeguards. The ANPRM, published on September 19, 2025, seeks stakeholder feedback on 58 questions spanning nine categories, including stablecoin issuer requirements, illicit finance prevention, foreign regulatory alignment, taxation, and economic impactsTreasury Seeks Public Comment on Implementation of the GENIUS Act^[1]. The comment period remains open until October 20, 2025U.S. Treasury Takes Next Step in Turning GENIUS Act Into Stablecoin Regulations^[2].

The ANPRM outlines the Treasury’s role in defining “payment stablecoins” as digital assets designed for payment or settlement, backed by reserves, and pegged to a fixed monetary value. The legislation mandates that only permitted payment stablecoin issuers (PPSIs)—including subsidiaries of insured banks, federal or state-qualified entities—may issue such tokens in the U.S. by 2028. The Treasury is also tasked with ensuring compliance with AML and sanctions laws, establishing reserve transparency, and determining whether foreign regulatory regimes are comparable to U.S. standardsGENIUS Act Implementation - Federal Register^[3]. Additionally, the Act prohibits non-financial companies from issuing stablecoins unless the interagency Stablecoin Certification Review Committee deems them non-risky to the banking systemTreasury Seeks Input on GENIUS Act Implementation^[4].

A key focus of the ANPRM is mitigating illicit finance risks. The Treasury seeks input on how to enforce AML programs for stablecoin issuers, including technological capabilities to block sanctioned transactions and monitor suspicious activity. The agency also requests data on how financial institutions detect illicit activity in digital assets, building on an earlier request for comment issued in August 2025U.S. Treasury Opens Public Comments on Stablecoin Rules^[5]. The GENIUS Act empowers the Treasury to designate noncompliant foreign stablecoin issuers, restricting U.S. service providers from facilitating their secondary market tradingGENIUS Act Implementation - Federal Register^[6].

The ANPRM also addresses taxation and insurance considerations. While the GENIUS Act does not specify tax treatments for stablecoins, the Treasury asks whether IRS guidance on their classification would aid taxpayers. Insurance-related questions explore how the Act might affect coverage for stablecoin-related risks, including potential roles for insurers as PPSIs or service providersGENIUS Act Implementation - Federal Register^[7]. The ANPRM further examines economic data, including compliance costs for issuers, benefits of regulatory clarity, and impacts on transaction efficiency and market participationGENIUS Act Implementation - Federal Register^[8].

Stakeholders, including the American Bankers Association (ABA), have emphasized the need for balanced regulation. ABA President Rob Nichols highlighted concerns that stablecoins could disintermediate core banking activities like deposit-taking and lending, urging regulators to ensure that incentives for holding stablecoins do not undermine traditional financial systemsTreasury Seeks Input on GENIUS Act Implementation^[9]. The Treasury’s approach aims to foster innovation while addressing risks, with the ANPRM serving as a foundational step before finalizing regulationsU.S. Treasury Takes Next Step in Turning GENIUS Act Into Stablecoin Regulations^[10].

The public comment period is part of a broader effort to solidify the U.S. as a global hub for crypto innovation. Lawmakers from both parties are advancing complementary legislation, such as the Digital Asset Market Clarity Act in the House, to establish a comprehensive regulatory framework. The Treasury’s actions align with President Trump’s directive to create “friendly” crypto regulations, reflecting growing bipartisan support for structured digital asset marketsU.S. Treasury Takes Next Step in Turning GENIUS Act Into Stablecoin Regulations^[11].