U.S. Treasury Opens Second Round of Feedback on GENIUS Act Implementation

Earlier in August, the Treasury had already taken an initial step by issuing a formal Request for Comment (RFC) on draft guidance under the GENIUS Act. That earlier initiative was designed to gather views on how federal regulation could support responsible innovation in the stablecoin sector while addressing risks. The new Advance Notice of Proposed Rulemaking builds directly on that process, representing a progression from preliminary feedback to a structured path toward regulation.

The GENIUS Act, passed earlier this year, is the first comprehensive U.S. law focused specifically on stablecoins. Stablecoins are digital tokens designed to maintain a fixed value, often tied to the U.S. dollar or another currency, and are increasingly used in payments, remittances, and decentralized finance. The law directs Treasury to create rules that both encourage innovation and protect the financial system. Policymakers have expressed concerns about whether stablecoins are adequately backed by liquid reserves, whether users are given clear and accurate information about the risks involved, and whether these tokens could be exploited for unlawful purposes such as money laundering or sanctions evasion.

The ANPRM itself does not impose new obligations but instead asks detailed questions to inform the eventual rules. Treasury is seeking input on how reserves should be held and disclosed, how oversight should be coordinated between federal and state regulators, and what safeguards should be put in place to prevent misuse. It is also asking for perspectives on how U.S. regulation should take into account global practices, recognizing that stablecoins circulate across borders and that inconsistent rules could create opportunities for regulatory arbitrage. In addition, Treasury is looking for guidance on tax treatment, sanctions compliance, and methods to detect and prevent illicit activity.

The public comment window will remain open for thirty days from the date of publication in the Federal Register. All comments will be made available through the government’s online portal, providing transparency into the range of views submitted. After reviewing the feedback, Treasury is expected to issue a more detailed proposed rule, which would itself go through another round of public comment before being finalized. This step-by-step process is standard in U.S. federal rulemaking and ensures that regulations are built on both technical expertise and broad public participation.

For stablecoin issuers and users, the significance of this process cannot be overstated. Clear federal rules could provide greater legal certainty, help build public trust, and potentially encourage wider adoption of stablecoins in mainstream finance. At the same time, new requirements are likely to bring stricter obligations for issuers, including audits of reserves, mandatory disclosures, and direct oversight by regulators. How these rules are crafted may determine whether stablecoins become a trusted component of the financial system or face constraints that limit their growth.

The wider financial industry is watching closely. Stablecoins are already being used in trading, settlement, and payments, and some analysts argue they could play a role in enhancing efficiency in cross-border transactions. However, the absence of clear rules has left open questions about consumer safety and financial stability. Past episodes where stablecoins lost their peg or faced sudden liquidity crises have underscored the risks that regulators are seeking to address. By creating a framework under the GENIUS Act, the Treasury aims to reduce these vulnerabilities while allowing the technology to develop in a responsible manner.

In addition to shaping oversight of stablecoins themselves, the consultation process is expected to influence the wider digital asset regulatory landscape. By clarifying how one category of digital assets will be supervised, the Treasury may set precedents that affect future rulemaking for other forms of cryptocurrencies and tokenized assets. Market participants are watching closely to see whether the GENIUS Act becomes a model for broader digital finance regulation in the United States, or whether it remains limited to stablecoins alone.

The release of this ANPRM marks the first concrete step in moving the GENIUS Act from legislation into practice. It signals that the federal government intends to take a measured but serious approach to stablecoin oversight, beginning with public engagement and proceeding toward enforceable rules. The coming months will reveal how Treasury integrates the feedback it receives and how quickly stablecoin regulation moves toward completion.