The US Treasury just published its first proposed rules for the GENIUS Act, the first federal stablecoin law in American history, signed by Trump in July 2025. The 60-day public comment period starts today.
The law requires every stablecoin issuer operating in the US to back their tokens one-for-one with high-quality liquid assets: US dollars, Federal Reserve balances, Treasury bills with 93 days or less to maturity, and qualifying money market funds. No corporate bonds. No exotic collateral. Dollar-denominated, short-duration, US government paper.
Today's rulemaking focuses on something specific, the criteria for determining whether state-level regulatory regimes are "substantially similar" to the federal framework. Under the GENIUS Act, stablecoin issuers with $10 billion or less in outstanding issuance can opt for state-level regulation, but only if the state's rules meet the Treasury's standard. This is the federal government drawing the line on what counts.
The stablecoin market currently sits around $320 billion. Every dollar of that now needs to be backed by short-dated Treasuries or equivalent reserves. That makes stablecoin issuers some of the largest buyers of US government debt on the planet. Tether alone holds more short-term Treasuries than most countries. Circle is one of the top 10 holders of T-bills globally.
This is why the government wants stablecoins regulated rather than banned. At a time when China and Japan are reducing their Treasury holdings, stablecoin issuers are absorbing the supply. Stephen Miran at the Federal Reserve acknowledged in November 2025 that stablecoins are already "contributing to the dollar's dominance." The GENIUS Act doesn't just regulate stablecoins, it turns them into a structural pillar of US debt financing.
Final regulations are due by July 18, 2026. Full enforcement begins 120 days after that. The era of unregulated dollar stablecoins in the US is ending, but what's replacing it may matter more. The federal government is codifying a system where private companies issue dollar-denominated tokens backed by government debt, regulated by the Treasury, and used for global payments. It's a public-private monetary layer that didn't exist five years ago, and it runs on rails the traditional banking system doesn't control.
