The Treasury Department today proposed a new rule to establish what factors it will consider when stablecoin issuers request to be subject to state regulation rather than federal regulation, as permitted under the Genius Act.
The Genius Act allows payment stablecoin issuers with a consolidated total outstanding issuance of less than $10 billion to opt for regulation under a state-level regulatory regime, provided that the state’s regime is “substantially similar” to the federal regulatory framework. The proposed rule would establish standards for determining whether a state framework meets those criteria.
The rule provides states with “wide latitude” to deviate from federal regulations while still remaining “substantially similar” to the federal framework, according to the text of the proposal. Also, the term “state-level regulatory regime” is broadly defined “to provide states with discretion to design their regimes using a mix of legislation, regulation and enforceable guidance as they deem appropriate.”
Among other things, the rule would give states broad discretion in certain areas, such as capital standards, while setting uniform state and federal standards for reserve requirements and for anti-money laundering and sanctions program requirements.
Public comment on the proposal is due 60 days following publication in the Federal Register.
