U.S. Treasury Proposes April 2026 Principles for Evaluating State Stablecoin Regulatory Regimes Under GENIUS Act

The U.S. Department of the Treasury published a proposed rule on 3 April 2026 implementing Section 4(c) of the GENIUS Act, establishing broad-based principles for determining when a state-level regulatory regime is substantially similar to the federal regulatory framework applicable to permitted payment stablecoin issuers. The proposed rule appeared in the Federal Register as Document Number 2026-06489. The GENIUS Act permits stablecoin issuers to operate under qualifying state regimes rather than the federal framework, but only if Treasury certifies those regimes as substantially similar and as meeting or exceeding the standards and requirements of GENIUS Act Section 4(a).

The proposed regulations at Part 1521 establish the methodology Treasury will apply under proposed Section 1521.2 to assess substantial similarity. Proposed Section 1521.2(b)(1) specifies that a state regime must meet or exceed the standards and requirements of GENIUS Act Section 4(a) to qualify. Section 4(a) prescribes uniform requirements — including reserve asset standards, redemption rights, rehypothecation restrictions, and monthly certification requirements — which Treasury evaluates through the broad-based principles set out in proposed Section 1521.3 for uniform requirements and Section 1521.4 for state-calibrated requirements.

State-chartered stablecoin issuers operating in New York, California, Wyoming, and other states with existing money transmission or digital asset licensing regimes must assess whether their home-state regime qualifies under the proposed Treasury principles. A state regime that does not meet the substantial similarity threshold requires covered issuers to comply with the federal GENIUS Act framework instead. Issuers planning a state-based operational structure must monitor Treasury's final rule and any state-level legislative responses that bring state regimes into alignment.

The proposed rule distinguishes between uniform requirements — standards that must apply identically under state and federal law — and state-calibrated requirements — standards for which states retain flexibility to tailor the specific approach provided the underlying level of protection is equivalent. Reserve assets, redemption mechanics, and rehypothecation are among the areas evaluated under the state-calibrated track. The comment period for this proposed rule runs separately from the FinCEN/OFAC proposed rule published on April 10, 2026.

Our firm advises stablecoin issuers, state-chartered financial institutions, and digital asset funds on GENIUS Act compliance strategy, state versus federal licensing analysis, and regulatory mapping under the Treasury proposed rule. We maintain a dedicated partner network across U.S. stablecoin regulation and digital asset law. Contact us to discuss your state licensing strategy. Our work covers matters including: GENIUS Act compliance, stablecoin state licensing, Treasury substantially similar analysis, payment stablecoin issuer requirements, reserve asset compliance, and digital asset law.

Source: GENIUS Act Broad-Based Principles for Determining Whether a State-Level Regulatory Regime Is Substantially Similar to the Federal Regulatory Framework, Doc. No. 2026-06489, U.S. Department of the Treasury (published April 3, 2026), https://www.federalregister.gov/documents/2026/04/03/2026-06489/genius-act-broad-based-principles-for-determining-whether-a-state-level-regulatory-regime-is (confirmed 22 April 2026).

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