Treasury Proposes State-Level Stablecoin Regulations for Smaller Tokens

The U.S. Treasury has issued a notice of proposed rulemaking for state-level governance of stablecoins with market caps under $10 billion. The initiative aims to establish a regulatory framework while ensuring alignment with federal standards.

• The Treasury’s proposed rulemaking allows states to regulate stablecoins with market caps under $10 billion.
• Regulations must align with federal standards, including 1:1 reserve backing and monthly reporting.
• States may impose stricter liquidity and risk management rules than federal requirements.
• Stablecoins exceeding $10 billion in market cap will be regulated at the federal level.
• The GENIUS Act, signed by President Trump, enables state-level governance for smaller stablecoins.
• Debates over yield-bearing stablecoins continue to stall broader regulatory legislation.