Agencies Request Comments on GENIUS Act Implementation

I. Introduction 

The GENIUS Act has authorized several regulatory agencies to issue regulations to develop the first comprehensive federal regulatory framework governing payment stablecoins in the United States. The statute directs multiple federal financial regulators to implement a coordinated supervisory structure governing issuance, reserve management, redemption rights, anti-money laundering compliance, custody, and market structure.^[1]

Congress imposed an unusually compressed implementation timeline. Federal agencies were directed to issue implementing regulations within one year of enactment.^[2] The result was a rapid series of proposed rules, requests for comment, interpretive notices, and joint agency guidance from:

• the Office of the Comptroller of the Currency (“OCC”);^[3]
• Department of the Treasury;^[4]
• Financial Crimes Enforcement Network (“FinCEN”);^[5]
• Office of Foreign Assets Control (“OFAC”);^[6]
• Federal Deposit Insurance Corporation (“FDIC”);^[7]
• National Credit Union Administration (“NCUA”);^[8]
• joint interpretive guidance issued by the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”);^[9] and
• not published at this date: regulatory guidance from the Federal Reserve.

This article outlines themes that recur throughout the notices.  Each of the proposed rules or guidance is discussed in a separate section to provide an overview of the regulatory structure that the agencies have proposed in a series of Federal Register notices beginning in December 2025 and continuing through late April 2026, when this article was written.  The final rules are expected to be issued in July 2026 and will certainly contain revisions of the proposals based on comments from interested parties.  

2. Themes Across the Notices

Collectively, these materials begin the process of integrating GENIUS Act legislative requirements into a coordinated federal regulatory architecture for payment stablecoins. Several broad themes recur throughout the notices and proposed rules.

Payment-system Infrastructure: Federal regulators consistently treat payment stablecoins as payment-system infrastructure rather than speculative securities products. The rulemakings repeatedly emphasize redemption rights, reserve integrity, operational resilience, and liquidity management rather than investment-return expectations.

Reserve Management: The agencies uniformly require conservative reserve management. Proposed reserve frameworks generally limit backing assets to highly liquid instruments such as U.S. currency, Federal Reserve balances, short-duration Treasury securities, repurchase agreements, and government money market funds, as required by the GENIUS Act.

AML/OFAC Compliance: The agencies integrate stablecoin issuers into the federal anti-money laundering and sanctions compliance system. FinCEN and OFAC proposals require stablecoin issuers to maintain AML programs, suspicious activity reporting capability, customer due diligence systems, and sanctions screening procedures comparable to those required of traditional financial institutions.

Payment Stablecoins Are Not Insured Deposits or Securities: The rulemakings attempt to distinguish payment stablecoins from both insured deposits and securities. The FDIC proposal repeatedly emphasizes that stablecoin holders do not receive pass-through deposit insurance protection merely because reserve assets are maintained at insured depository institutions.^[10] At the same time, the SEC-CFTC guidance clarifies that properly structured payment stablecoins issued under the GENIUS Act generally are not securities under federal securities laws.^[11]

How to Integrate Blockchain-based Systems:  The proposals collectively reflect increasing federal concern regarding financial stability, payment-system integrity, sanctions enforcement, and the preservation of U.S. dollar dominance in emerging digital payment systems. Treasury, FinCEN, OCC, and FDIC repeatedly frame stablecoin regulation not merely as a consumer-protection exercise, but as part of a broader effort to integrate blockchain-based payment systems into the regulated U.S. financial architecture.

II. Office of the Comptroller of the Currency (“OCC”)

A. OCC Request for Information / Supervisory Notice

The OCC’s initial notice and request for information served as an early conceptual framework for the federal government’s prudential supervision of payment stablecoins. It establishes definitions consistent with the GENIUS Act and sets requirements for regulations consistent with the Act. The OCC largely approached stablecoins as emerging payment-system infrastructure rather than speculative digital assets and emphasized the importance of reserve integrity, operational resilience, cybersecurity, custody, and anti-money laundering compliance.^[12]

The notice repeatedly stressed the relationship between stablecoins and broader banking-system stability. The OCC signaled that payment stablecoins would likely require banking-style supervision even when issued by nonbank entities. The notice also emphasized coordination with Treasury, FinCEN, OFAC, and other federal agencies concerning AML obligations, lawful-order compliance, and sanctions enforcement.

Importantly, the OCC framed stablecoins as operationally dependent upon distributed ledger technology, smart contract governance, custody and private key management, reserve management systems, and redemption mechanisms.

B. OCC Proposed Rule

The OCC proposed rule effectively became the prudential centerpiece of the emerging federal stablecoin framework. The proposal establishes standards governing “Federal Qualified Payment Stablecoin Issuers,” including nonbank entities approved by the OCC, uninsured national banks, and certain federal branches authorized to issue payment stablecoins.^[13]  The proposal imposes extensive prudential obligations based on the GENIUS Act requirements that address reserve management, liquidity, redemption capability, operational resilience, governance, cybersecurity, custody, and AML coordination.

As required by the GENIUS Act, the OCC requires one-to-one reserve backing using highly liquid reserve assets.  The proposal repeatedly emphasizes redemption integrity and operational liquidity. Stablecoin issuers must maintain the capability to monetize reserve assets rapidly during stressed conditions and maintain systems ensuring uninterrupted redemption operations.^[14]

The OCC joint proposal is particularly significant because Treasury later adopts the OCC framework as the principal benchmark for evaluating whether state regulatory systems are “substantially similar” to the federal framework under the GENIUS Act. As a result, the OCC proposal is likely to become the dominant prudential model governing U.S. stablecoin issuers.

III. SEC–CFTC Joint Guidance

The joint SEC-CFTC guidance represents one of the most important interpretive developments accompanying the GENIUS Act rulemakings because it establishes a coordinated federal taxonomy for digital assets.^[15] For the first time, the agencies have agreed upon a taxonomy for digital assets based on broad categories that are classified as securities, commodities or non-security assets.  These categories are spelled out in detail:

• digital commodities;
• digital collectibles;

digital tools;

• stablecoins;
• and digital securities.^[16]

The agencies expressly state that GENIUS Act-compliant payment stablecoins generally are not securities. The guidance also clarifies that investment contract analysis under the Supreme Court’s Howey doctrine focuses on the surrounding transaction and promoter representations rather than automatically classifying the underlying digital asset itself as a security indefinitely.  The definition of “investment contract” is clarified by the guidance, as follows, “Under Howey, the term ‘‘investment contract’’ means any contract, transaction, or scheme whereby a person invests money in a common enterprise and reasonably expects profits to be derived from the efforts of others.” . . .   “The Howey test’s ‘‘efforts of others’’ requirement is satisfied when ‘‘the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise.’’ (emphasis added)^[17]

The guidance significantly narrows potential securities-law treatment for several core blockchain activities, including protocol mining, protocol staking, wrapping, and many airdrops.  At the same time, the guidance reinforces the growing role of the CFTC in supervising decentralized commodity-style digital asset markets. The agencies explain that many non-security crypto assets may nonetheless qualify as commodities subject to the Commodity Exchange Act and CFTC oversight.^[18] The guidance is significant because it helps harmonize the GENIUS Act framework with broader federal market-structure policy and reduces some of the regulatory uncertainty that previously surrounded digital asset classification.

IV. Treasury Proposed Rule

The Department of the Treasury’s proposed rule addresses one of the central structural compromises embedded in the GENIUS Act: the continued role of states in supervising payment stablecoin issuers. The statute allows state-qualified payment stablecoin issuers to operate under state supervision if the state regulatory framework is “substantially similar” to the federal system.^[19]Treasury interprets this standard narrowly. The proposal establishes federal requirements as a minimum prudential floor and distinguishes between “uniform requirements”; and “state-calibrated requirements.”^[20]

Treasury explicitly pushed for comments to obtain feedback from the public and interested parties concerning state frameworks.  For example, Treasury asks seventy-eight questions about every aspect of the proposed rules and how they should be defined in practice.  The questions are broadly written to help the regulators identify the scope of regulations required.  Issues and principles included in the information requests include uniform regulations for reserve backing, redemption rights, AML compliance, sanctions enforcement and lawful-order capability.

States retain somewhat greater flexibility regarding supervisory procedures and capital methodologies, but Treasury repeatedly emphasizes that states may not materially weaken substantive federal protections.^[21]

Treasury also adopts the OCC framework as the principal benchmark against which state systems will be evaluated.^[22] This effectively centralizes federal authority while preserving a limited state pathway.

The proposal repeatedly warns against regulatory fragmentation and “race to the bottom” concerns. Treasury expresses concern that inconsistent state reserve standards or supervisory expectations could undermine confidence in dollar-backed stablecoins and create broader financial stability risks.

V. FinCEN / OFAC Joint Proposed Rule

The Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) proposal represents the anti-money laundering and national security component of the GENIUS Act framework. The proposal formally integrates permitted payment stablecoin issuers into the Bank Secrecy Act and sanctions compliance architecture.^[23] The agencies require stablecoin issuers to maintain AML programs, suspicious activity reporting systems, customer identification procedures, blockchain monitoring capability, sanctions screening systems, and lawful-order compliance mechanisms.^[24]

Because of the criminal enforcement focus of FinCEN and OFAC, the proposed rule imposes the same basic rules under the Bank Secrecy Act and OFAC authorities as apply to current financial institutions.  Given the digital nature of payment stablecoins, the agencies repeatedly cites concerns involving money laundering, ransomware, scams and fraud that permeate the crypto sector, terrorist financing, sanctions evasion, narcotics trafficking, state-sponsored cyber operations, and illicit finance networks using stablecoins.

The proposed rule highlights the various roles of different types of organizations and how the rules will apply, including all of the types of financial institutions.  There is substantial analysis of the regulatory burdens and costs that the rules will impose on Permitted Payment Stablecoin Issuers (PPSIs).  The deeply intrusive nature of FinCEN records requirements will be difficult for many current market participants to justify and implement.  

The proposal also strongly emphasizes “technical capability” requirements. PPSIs must meet the detailed and onerous requirements for AML/CFT programs.  They also must maintain the operational capability to freeze, block, reject, burn, or otherwise restrict transfers of stablecoins when required by lawful order or sanctions obligations.^[25]  One of the sticking points for PPSIs will be the need to specify owners of wallets containing payment stablecoins.  

The proposal is particularly significant because it effectively transforms regulated stablecoins into programmable compliance infrastructure integrated into the federal financial surveillance and sanctions-enforcement system.  Stablecoins are digital native tokens that will operate smoothly in the rapidly evolving digital financial architecture for payments and accounts.

VI. Federal Deposit Insurance Corporation (“FDIC”)

A. Prior FDIC Guidance 

Prior FDIC guidance established an approval framework for FDIC-supervised institutions seeking to engage in stablecoin-related activities. The agency emphasized that institutions must demonstrate adequate risk management, operational controls, liquidity management, cybersecurity, and compliance capability before engaging in stablecoin issuance or related digital asset activities.

The guidance reflected broader FDIC concern regarding operational, liquidity, and reputational risks associated with digital asset activities conducted by insured depository institutions or their subsidiaries.

B. FDIC Proposed Rule

The FDIC’s proposed rule focuses heavily on the relationship between payment stablecoins and the traditional banking and deposit insurance system. The FDIC is, “the primary Federal payment stablecoin regulator of subsidiaries of insured State nonmember banks and State savings associations (collectively, ‘‘FDIC-supervised IDIs’’) approved to issue payment stablecoins.”^[26]

The proposal establishes standards governing reserve assets, custody, redemption, reserve segregation, and tokenized deposits.  As stated in the proposed rule:

The proposed rule aims to establish a tailored, principles-based regulatory regime for FDIC-supervised PPSIs and FDIC-supervised custodians, consistent with the GENIUS Act, to support the responsible growth and use of digital assets and related technologies in the banking sector.^[27]

One of the proposal’s most important contributions is its formal distinction between “payment stablecoins”; and “tokenized deposits.”  The FDIC explains that tokenized deposits remain deposits under the Federal Deposit Insurance Act even when represented using distributed ledger technology, while payment stablecoins remain separate digital instruments governed by the GENIUS Act framework.^[28]

The proposal repeatedly emphasizes that payment stablecoins are not insured deposits and that stablecoin holders do not receive pass-through FDIC insurance protection merely because reserve assets are maintained at insured banks. The FDIC is proposing to amend 12 CFR Parts 324, 330, and 350 to implement the new rules.   

The FDIC also imposes strict reserve and liquidity requirements modeled on the GENIUS Act requirements.  The proposal also prohibits many forms of reserve rehypothecation and restricts interest or yield arrangements tied solely to stablecoin ownership.

The FDIC is requesting a large volume of public comments in 139 questions within the notice.  This is an excellent example of an agency using the “notice and comment” approach to rulemaking to achieve novel new results in collaboration with the pubic and interested parties. Response are to be filed by June 9, 2026, so many revisions of the proposed rule are possible in its final form.

VII. National Credit Union Administration (“NCUA”)

The NCUA proposal adapts the GENIUS Act framework to the cooperative ownership structure of the credit union industry. Unlike the OCC and FDIC proposals, which primarily contemplate bank-controlled subsidiaries, the NCUA proposal anticipates jointly owned stablecoin issuers operating through credit union service organizations (“CUSOs”) or cooperative ownership structures.^[29]

The NCUA proposes that stablecoin applications generally be filed jointly by the proposed issuer and controlling credit union parent entities.^[30] “The Board believes that if the NCUA required every single investing FICU to apply to the NCUA directly for PPSI licenses instead of the FICU subsidiary applying jointly with any FICU Parent Company(ies), a widely held applying FICU subsidiary would result in an unmanageable number of applications from each applying FICU. The Board is of the view that widely held FICU subsidiaries are likely and thinks that the chosen approach will minimize burdens on both the credit union industry and the NCUA.”^[31]

The proposal focuses heavily on licensing procedures, ownership thresholds, parent company standards, governance, and supervisory authority over multi-owner entities.  The agency also requests extensive comment regarding cybersecurity, blockchain governance, operational resilience, transaction monitoring, and law-enforcement compliance capability.

Importantly, the proposal reserves many substantive prudential standards for future rulemaking. Nonetheless, the proposal demonstrates that federal regulators intend for credit unions to participate meaningfully in the stablecoin ecosystem rather than excluding smaller cooperative financial institutions from emerging digital payment systems.

VIII. Missing Federal Reserve Rules

One notable absence from the current rulemaking package is a comprehensive Federal Reserve proposed rule implementing the GENIUS Act framework. The Federal Reserve nonetheless retains significant statutory authority relating to reserve balances, payment systems, state member bank supervision, systemic liquidity, settlement infrastructure, and broader monetary policy considerations.

Future Federal Reserve rulemaking likely will address access to Federal Reserve master accounts, reserve account treatment for stablecoin issuers, payment-system interoperability, settlement finality, liquidity and systemic risk oversight, and the relationship between stablecoins and broader monetary transmission mechanisms.

The absence of formal Federal Reserve rules is particularly significant because payment stablecoins ultimately rely upon the broader dollar settlement infrastructure controlled by the Federal Reserve System. As stablecoin markets expand, the Federal Reserve likely will play an increasingly important role in determining how stablecoin issuers interact with core U.S. payment and reserve systems.

IX. Conclusion

The GENIUS Act rulemakings collectively establish the foundation for an integrated federal framework governing payment stablecoins in the United States. Following the outline in the GENIUS Act, all of the agencies consistently are proposing rules to address reserve integrity, redemption rights, operational resilience, AML and sanctions compliance, supervisory visibility, and payment-system stability.

At the same time, several major issues remain unresolved, including decentralized finance integration, secondary-market liability, foreign issuer treatment, intermediary yield programs, and the long-term relationship between payment stablecoins and tokenized deposits.  As these issues are addressed by the various regulators, and possibly by new market structuring legislation, such as the CLARITY Act, these issues will be settled, or at least agreed approaches will emerge to reduce the current paucity of guidance.

The broader direction of federal policy, however, is increasingly clear. The United States is moving toward a highly supervised digital dollar framework in which payment stablecoins may operate at scale, but only within a regulated financial architecture designed to preserve financial stability, federal enforcement authority, and confidence in dollar-denominated digital payment systems.

^[1]GENIUS Act §§ 1–16.

^[2]GENIUS Act §§ 13.

^[3] Joint Notice of the OCC, FDIC, and NCUA, Anti-Money Laundering and Countering the Financing of Terrorism Programs, 91 Fed. Reg. 18,304 (April 10, 2026). See Also Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency (OOC Notice), 91 Fed. Reg. 10,202 (March 2, 2026).

^[4]Department of the Treasury, GENIUS Act Broad-Based Principles for Determining Whether a State-Level Regulatory Regime Is Substantially Similar to the Federal Regulatory Framework, 91 Fed. Reg. 16,844, (April 3, 2026).

^[5]Joint notice of the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), Permitted Payment Stablecoin Issuer Anti-Money Laundering/Countering the Financing of Terrorism Program and Sanctions Compliance Program Requirements, 91 Fed. Reg. 18,582, (April 10, 2026).

^[6]Id.

^[7]Federal Deposit Insurance Corporation (FDIC), GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions, 91 Fed. Reg. 18,534, (April 10, 2026).

^[8]National Credit Union Administration (NCUA), Investments in and Licensing of Permitted Payment Stablecoins Issuers, 91 Fed. Reg. 6,531, (February 12, 2026).

^[9]Joint notice of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets, 91 Fed. Reg. 13,714, (March 23, 2026).

^[10]FDIC Proposed Rule, supra note 7, at 18,535.

^[11]SEC–CFTC Joint Guidance, supra note 9, Part III  at 13,717.

^[12]OCC Notice, supra note 3.

^[13]Joint Notice, supra note 3.

^[14] Id.

^[15]Joint SEC-CFTC Notice, supra note 9.

^[16] Id.

^[17]Id. at 13717 and footnote 42.

^[18]Joint SEC-CFTC Notice, supra note 9.

^[19]Treasury Notice, supra note 4.

^[20] Id.

^[21] Id.

^[22]Id. at 16,846.

^[23]Joint FinCEN/OFAC Notice, supra note 5.

^[24]Id.

^[25]Id.

^[26]FDIC Notice, supra note 7 at 18,534.

^[27]Id.

^[28]Id. at 18,560.

^[29]NCUA Notice, supra note 8.

^[30]Id. at 6,533.

^[31]Id.