The U.S. Department of the Treasury’s (Treasury’s) recently issued advance notice of proposed rulemaking (ANPRM) to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act presents a critical opportunity for industry stakeholders—especially stablecoin issuers and digital asset service providers—to help define the regulatory playing field before the rules are written.
The GENIUS Act, enacted on July 18, 2025, provides a comprehensive framework for the federal regulation of payment stablecoins. As defined in the GENIUS Act, a payment stablecoin is a digital asset i) that is, or is designed to be, used as a means of payment or settlement and ii) the issuer of which is obligated to convert, redeem, or repurchase for a fixed amount of monetary value and represents or creates the reasonable expectation that it will maintain a stable value relative to a fixed amount of monetary value.
While the GENIUS Act establishes the statutory framework, the real impact to the industry will generally come through implementing regulations, which will set out the binding requirements and compliance obligations. Treasury has been granted broad rulemaking authority and is now soliciting public input on core questions that will determine how the GENIUS Act will apply to the industry in practice.
Particularly noteworthy in the ANPRM, Treasury is soliciting industry perspectives on areas where the statute could leave room for regulatory clarification. The comment process presents an important opportunity to shape the evolving regulatory framework for payment stablecoins. These issues extend beyond stablecoin issuers and will affect participants across the digital asset ecosystem.
GENIUS Act Recap
The GENIUS Act introduces a clear gatekeeping model: only entities recognized as “permitted payment stablecoin issuers” (PPSIs) and qualifying foreign issuers may issue payment stablecoins in the U.S. once the law takes effect, subject to certain exceptions and safe harbors. The GENIUS Act provides three primary categories of PPSIs, all of which must be formed in the United States: i) a subsidiary of an insured depository institution; ii) a federal qualified payment stablecoin issuer; or iii) a state qualified stablecoin issuer. We discussed strategic paths available for a nonbank company to become a PPSI while remaining outside the maximalist regulatory regime that applies to commercial banks here.
In addition, beginning on July 18, 2028, “digital asset service providers” (DASPs) may not offer or sell a payment stablecoin to any person in the U.S. unless the payment stablecoin is issued by a PPSI or qualifying foreign issuer. The Act broadly defines DASPs as any person that, for compensation or profit, engages in the business in the U.S. (including on behalf of customers or users in the U.S.) of i) exchanging digital assets for monetary value; ii) exchanging digital assets for other digital assets; iii) transferring digital assets to a third party; iv) acting as a digital asset custodian; or v) participating in financial services relating to digital asset issuance.
U.S. Treasury Authority Under the GENIUS Act
The GENIUS Act vests Treasury with broad rulemaking responsibilities, including with respect to implementing the Act’s limitations on the issuance of payment stablecoins in the U.S., among other foundational questions.
In addition, the Secretary of the Treasury chairs the Stablecoin Certification Review Committee (SCRC), an interagency committee that also includes the Chair of the Federal Reserve Board of Governors and Chair of the Federal Deposit Insurance Corporation. Among other things, the SCRC reviews and approves state regulatory regimes under which certain state-qualified payment stablecoin issuers may operate.
Invitation for Public Comment
Treasury’s ANPRM seeks public input on a range of topics that could form the basis of regulations issued under the GENIUS Act, including in Treasury’s role as chair of the SCRC. The ANPRM identifies several foundational questions for public comment, including the following:
- Scoping:
- Is the scope of the term “payment stablecoin” sufficiently clear as defined in the GENIUS Act? If not, what additional clarification should be provided?
- Is the scope of the term “digital asset service provider” sufficiently clear as defined in the GENIUS Act? If not, what additional clarification should be provided?
- Extraterritorial effect for DASPs: With respect to the GENIUS Act’s prohibition for DASPs from offering or selling a payment stablecoin to a person in the U.S. unless the stablecoin is issued by a PPSI, is the extraterritorial application of that provision sufficiently clear as stated in the GENIUS Act? If not, what additional clarification should be provided?
- Prohibition on interest: With respect to the GENIUS Act’s prohibition for PPSIs and qualifying foreign issuers from paying the holder of any payment stablecoin any form of interest or yield, should any regulations be issued to clarify the meaning of “pay,” “interest,” “yield,” “solely,” or otherwise clarify the scope of this prohibition? In particular, should any regulations be issued to clarify whether, and to what extent, any indirect payments are prohibited?
- Limitations for non-financial companies: With respect to the GENIUS Act’s prohibition for certain non-financial services public companies from issuing payment stablecoins absent the unanimous vote of the SCRC for approval:
- What additional clarification is necessary on the scope or application of these restrictions?
- What factors should the SCRC consider in making a finding that, if a non-financial company issues payment stablecoins, it will not pose a material risk to the safety and soundness of the U.S. banking system, the financial stability of the United States, or the Deposit Insurance Fund? Are there any factors that should be excluded from consideration?
The comment period, which ends October 20, 2025, represents a critical opportunity for industry stakeholders to help shape the regulatory framework for payment stablecoins while it is still under formation. Wilson Sonsini has deep experience advising digital asset companies on federal financial regulations and engaging with federal authorities during rulemaking to advance business priorities, provide practical insights, and ensure operational realities are understood.
