Treasury Seeks Public Input on Tech Tools to Combat Stablecoin Crime

The U.S. Department of the Treasury has issued a Request for Comment in accordance with the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signaling a continued effort to develop a regulatory framework for stablecoin issuers in the United States. This initiative aligns with the Biden administration’s broader strategy to strengthen American leadership in digital financial technology, as outlined in Executive Order (E.O.) 14178. The request seeks input on innovative methods and technologies—such as artificial intelligence, blockchain, and digital identity verification—that regulated institutions can employ to combat illicit financial activities involving digital assets.

The comment period will remain open for 60 days, concluding on October 17, 2025. Submissions will be publicly accessible on the regulations.gov website, enabling stakeholders to contribute insights on the effectiveness, costs, and risks associated with these tools. This engagement is a critical step in informing the Treasury’s ongoing research and policy development under the GENIUS Act, which aims to balance innovation with national security and financial integrity.

The request also reflects a growing emphasis on addressing the risks posed by illicit finance through technological advancements. While these tools offer significant potential, they also introduce new burdens for institutions, including resource allocation and compliance costs. The Treasury will evaluate these factors as it seeks to craft a regulatory environment that fosters innovation without compromising financial stability or consumer protection. The GENIUS Act mandates that the Treasury leverage public feedback to assess the broader implications of adopting such tools across the financial ecosystem.

Meanwhile, stablecoins like Tether (USDT) and USD Coin (USDC) continue to dominate the market. As of the latest data, USDT has a circulating supply of over 112 billion tokens, maintaining a consistent presence on multiple blockchain networks including Bitcoin, Ethereum, and Tron. USDC, while newer, has grown to a circulating supply of over 32 billion tokens and is backed by U.S. Treasury securities and cash equivalents. USDC also benefits from MiCA (Markets in Crypto-Assets) compliance in the European Union, setting it apart in terms of regulatory alignment compared to USDT.

Both stablecoins have demonstrated price resilience, remaining close to a $1 peg despite occasional market fluctuations. However, transparency and reserve composition remain points of differentiation. USDC provides monthly audits by an independent accounting firm, while USDT has historically faced scrutiny over the composition of its reserves, despite recent improvements in transparency. These factors influence investor confidence and regulatory considerations, particularly in jurisdictions where compliance is a priority.

The broader regulatory landscape for stablecoins is evolving, with increasing pressure on issuers to operate under clear and consistent rules. In the United States, the Treasury and other agencies are actively engaging with Congress to establish requirements that align stablecoin operations with the standards of traditional banking institutions. This includes provisions for reserve insurance and oversight mechanisms that could significantly reshape the market. As the Treasury moves forward with its request for comment, it is likely that the insights gathered will play a crucial role in shaping the future of stablecoin regulation in the U.S. and beyond.

Source: [1] Treasury Issues Request for Comment Related to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (https://home.treasury.gov/news/press-releases/sb0228) [2] USDT vs USDC: A comparison of leading stablecoins (https://www.moonpay.com/learn/cryptocurrency/what-is-the-difference-between-usdt-and-usdc)