The US Treasury has issued a notice of proposed rulemaking seeking public comment on how states should regulate stablecoins under the GENIUS Act.
The framework allows states to oversee issuers with market capitalisations below $10 billion, provided their rules align with federal standards.
“State-level regulatory regimes must lead to regulatory outcomes that are at least as stringent and protective as the Federal regulatory framework,”
The proposal said.
The rules require stablecoins to maintain 1:1 backing with cash or high-quality assets, alongside monthly disclosures and strict anti-money laundering compliance.
States may impose stricter requirements on liquidity, reserves and risk management, but cannot fall below federal thresholds.
Following the announcement the US stablecoin regulatory outlook remained uncertain.
Issuers exceeding $10 billion in market capitalisation will automatically fall under federal oversight, limiting state-level authority to smaller players.
The proposal comes as debate continues over yield-bearing stablecoins, with regulators and banks raising concerns despite growing industry support.