The Treasury Department issued a formal Request for Comment (RFC) on Monday, Aug. 18, regarding the recently passed stablecoin law, the GENIUS Act. Comments are requested no later than Oct. 17.
Signed into law last month by the White House, the GENIUS Act or Guiding and Establishing National Innovation for U.S. Stablecoins Act, aims to strengthen U.S. FinTech leadership, as outlined in Executive Order 14178, “Strengthening American Leadership in Digital Financial Technology,” the White House said in a statement last month.
Executive Order 14178 was issued in January and revokes Biden Administration digital assets guidance and executive orders, according to White House and other reports.
Under the GENIUS Act, stablecoin issuers will be subject to rules under the Bank Secrecy Act, just like other financial institutions. They would have to comply with all federal anti-money laundering (AML), sanctions, and customer due diligence laws.
Establishing a Framework
The RFC is part of the Treasury’s role in shaping a comprehensive regulatory framework for stablecoin issuers in the U.S. The GENIUS Act outlines a definition for stablecoins, establishes rules, institutes measures for transparency, and plans for further innovation, the White House said.
While stablecoins presently are used primarily for cross-border payments and for the buying and selling of crypto-assets, there are illegal activities like money laundering, sanctions evasion, and fraud that are big concerns, the White House said. The GENIUS Act institutes measures towards that end, with one move giving the Treasury Department a wider berth of enforcement power.
A bill to regulate payment stablecoins could happen in early 2027, or by the end of this year, depending on the finalization of Treasury and Federal Reserve regulations, per reports.
Rapid Growth, Lower Risk
A category of cryptocurrency, stablecoins are pegged to reserve assets like fiat currencies or gold. The first was Tether, introduced in 2014. Since then, the number of different stablecoins in circulation have been increasing an estimated 28% year-over-year, according to the World Economic Forum. In 2024, total transfer value climbed to $27.6 trillion, more than Visa and Mastercard combined.
The Treasury is seeking feedback on application programming interfaces (APIs), artificial intelligence, digital identity verification, and blockchain monitoring tools. It is also asking regulated financial institutions how technology is being used for tracking suspicious or illegal transactions tied to digital assets.
Feedback from the public will also help the Treasury weigh the effectiveness of tools being used, assess privacy and cybersecurity risks, plus analyze costs and benefits. Comments will be made publicly available at regulations.gov.
Not Everyone On Board
Sen. Elizabeth Warren (D-Mass.) called the GENUIS Act “deeply flawed” and saidat a minimum, it chips away at consumer protections.
“It opens the door to more sanctions evasion by countries like Iran and North Korea and Russia, and it helps international gangs move fentanyl into the US.”
Other outspoken critics of the legislation included Sen. Dick Durbin (D-Ill.), Jack Reed (D-RI), Rep. Majorie Taylor-Greene (R-GA), Sen. Josh Hawley (R-MO.) and others on both sides.
The National Conference of State Legislature (NCSL) sent a letter to Congress last week asking for the removal of Section 16(d) from the GENIUS Act. The NCSL is a coalition of state financial regulators, state legislators, consumer advocacy groups, and banking industry trade associations.
‘Crypto Capital of the World’
The White House Administration said it is working to position the U.S. as the “crypto capital of the world,” and said embracing digital assets will “drive economic growth and technological leadership.”
Earlier Executive Orders established a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. Calling digital assets the future, the White House “no one will do it better” and the U.S. “will own it.”
