State Regulators Push Back On Treasury’s Stablecoin Oversight Proposal
By CU Today Staff —
WASHINGTON--State banking regulators are urging the Treasury Department not to rely solely on forthcoming Office of the Comptroller of the Currency (OCC) rules when determining whether state stablecoin regulatory frameworks meet the standards required under the GENIUS Act, arguing that states should retain flexibility to tailor oversight while still meeting federal requirements.
In a comment letter filed by the Conference of State Bank Supervisors, regulators said Treasury’s proposed approach places too much emphasis on OCC regulations that have not yet been finalized and risks undermining the state regulatory pathway Congress preserved in the GENIUS Act. The group noted that states have been supervising stablecoin issuers for years and argued that state regimes should be judged on whether they satisfy the law’s core requirements rather than whether they mirror OCC rules line by line.
The dispute centers on Treasury’s proposal for determining whether a state regulatory regime is “substantially similar” to the federal framework. Under the GENIUS Act, certain stablecoin issuers with less than $10 billion in outstanding stablecoins may operate under approved state supervision instead of federal oversight. Regulators are asking Treasury to clarify that federal standards serve as a floor rather than a ceiling and that states may impose additional consumer protection, prudential, or risk-management requirements without jeopardizing certification.
The debate could prove significant for the future structure of U.S. stablecoin regulation. The OCC issued its proposed GENIUS Act rules in February and remains the lead federal regulator for many stablecoin issuers, but the statute also envisions an ongoing role for state supervisors. Banking groups, consumer advocates and state regulators have all submitted comments to Treasury as agencies race to finalize the regulatory framework ahead of the law’s implementation deadlines.
Originally reported by CU Today.