In recent weeks, U.S. federal agencies have taken significant steps toward translating the newly enacted GENIUS Act into an operational regulatory regime and expanding the role of stablecoins and tokenized assets in financial markets.
We previously published a client alert regarding the implementation of the GENIUS Act, highlighting its core provisions, including the compliance and reserve requirements, disclosure obligations, and timelines for implementation.
Since then, regulators have begun translating the statute into operational rules and are now actively seeking stakeholder input, with the potential to shape key definitions, compliance expectations, and the permissible use of tokenized assets.
The Treasury launched a broad rulemaking effort under the GENIUS Act, soliciting public input on a wide range of issues that will shape the first federal regulatory framework for payment stablecoins. The request for input, issued as an advance notice of proposed rulemaking (ANPRM), asks stakeholders to weigh in on a variety of topics, including how to provide regulatory clarity, what limitations should apply to issuances and marketing, how to ensure compliance with the Bank Secrecy Act and sanctions laws, and how to balance federal oversight with state-level oversight, comparable foreign regulatory regimes and tax obligations. The department is also interested in the technical aspects of stablecoin compliance, such as freezing or blocking unlawful transactions, monitoring suspicious activity, and establishing remediation processes for noncompliant entities. Comments are due by October 20, 2025.
Further, the Treasury Department issued a Request for Comment under the GENIUS Act focused specifically on methods to detect and deter illicit finance in digital assets. The notice seeks industry input on tools such as blockchain analytics, artificial intelligence, APIs, and identity verification technologies, as well as on the policies and processes financial institutions could use to freeze or block unlawful activity. Treasury also asks how regulators should assess whether a firm’s remediation efforts are sufficient when deficiencies are identified. Comments are due by October 17, 2025.
In addition, the Commodity Futures Trading Commission (CFTC) announced a tokenized collateral initiative to solicit views on the use of stablecoins and tokenized instruments as collateral in derivatives markets. Public input is requested by October 20, 2025. The initiative asks stakeholders to comment on the practical conditions under which tokenized assets could satisfy margin and collateral requirements, touching on valuation methodologies, custody, and settlement mechanics. Commenters are invited to weigh in now as the CFTC frames its approach, aligning with its ongoing “crypto sprint.”
Together, the Treasury’s ongoing implementation of the GENIUS Act and the CFTC’s tokenized collateral initiative highlight the rapid transition from a statutory framework to detailed regulatory obligations for stablecoins and related digital assets. For organizations active in the digital asset ecosystem—whether as issuers, custodians, payers, or financial institutions supporting stablecoin activity—these processes create both opportunities and risks: compliant stablecoins could become more widely accepted for payments and collateral, enhancing liquidity and efficiency, but market participants must also be ready to meet demanding standards around reserves, disclosures, AML and sanctions compliance, valuation and custody. With feedback deadlines approaching in mid to end of October, companies should consider submitting comments to influence the rulemaking while also reviewing their internal operational, compliance, and governance programs and practices to align with the evolving federal framework.