Briefing
The U.S. Treasury Department has initiated the rulemaking process for the GENIUS Act, which establishes a comprehensive federal framework for payment stablecoins, mandating that all issuers maintain 100% reserve backing with highly liquid assets like U.S. dollars or short-term Treasuries. This action immediately translates a legislative mandate into concrete operational requirements, compelling all current and prospective issuers to restructure their reserve management and public disclosure systems to meet the new standard. Critically, the Advance Notice of Proposed Rulemaking (ANPRM) seeks comment on the criteria for qualifying Foreign Payment Stablecoin Issuers (FPSIs) and defining “interoperability” with the domestic framework, setting the stage for a global compliance deadline of July 18, 2028, for Digital Asset Service Providers (DASPs).
Context
Prior to the GENIUS Act, the regulatory status of stablecoins in the U.S. was fragmented, relying on a patchwork of state money transmitter licenses and uncertain federal classification under the Howey Test for securities. This ambiguity created systemic risk, as reserve backing standards were voluntary or inconsistent, leading to market volatility and concerns over financial stability and consumer protection. The absence of a clear federal mandate meant that stablecoin issuers lacked a defined path to regulatory legitimacy, forcing them to navigate a costly, state-by-state compliance regime while operating under the constant threat of enforcement action from the SEC or CFTC.
Analysis
This ANPRM forces regulated entities to immediately update their compliance frameworks to anticipate the final rule, shifting the focus from legal defense to operational build-out. Issuers must architect a new reserve management system capable of proving 100% backing and producing the required monthly, public disclosures of reserve composition, which demands a significant overhaul of internal auditing and reporting modules. For DASPs and exchanges, the critical compliance task is developing a vetting process for foreign stablecoins, as they will be prohibited from offering non-compliant foreign tokens to U.S. persons after the 2028 deadline. The legislation’s clarity on reserve requirements has already spurred a 70% surge in stablecoin payment volume, particularly in B2B transactions, demonstrating that regulatory certainty unlocks substantial operational utility.
Parameters
- Reserve Requirement ∞ 100% backing with U.S. dollars or short-term Treasuries, which is mandatory for all Permitted Payment Stablecoin Issuers.
- Implementation Deadline ∞ July 18, 2028, the date by which DASPs must cease offering stablecoins not issued by a Permitted or Qualifying Foreign Issuer.
- Market Impact Metric ∞ 70% surge in stablecoin payment and remittance volume since the GENIUS Act was signed into law.
- Foreign Regime Focus ∞ The ANPRM specifically requests feedback on the criteria for determining a foreign stablecoin regime’s “comparability” to the U.S. framework.
Outlook
The Treasury’s rulemaking is the final step in establishing a robust, federally-backed stablecoin architecture, effectively setting a global benchmark for reserve standards and consumer protection. The focus on foreign regime comparability and interoperability suggests a strategic intent to export the U.S. standard, potentially forcing global stablecoin issuers to bifurcate their product offerings or adopt the GENIUS Act’s requirements worldwide to access the U.S. market. The comment period will be crucial for the industry to influence the technical definition of “interoperability” and the criteria for foreign qualification, which will ultimately determine the competitive landscape and the pace of institutional adoption over the next three years.
