NYDFS Proposes Stablecoin Rules Aligning With GENIUS Act and Capping Reserve Concentration

Stablecoins typically maintain their value through assets denominated in U.S. dollars and have become an important dollar channel for crypto trading and cross-border payments. The United States signed the GENIUS Act into law on July 18, 2025, establishing a federal issuance framework for the first time. It requires every $1 token to be backed by at least $1 in eligible reserve assets. Stablecoins, however, are not bank deposits and are not covered by FDIC deposit insurance.

The FDIC board approved a proposed rule on April 7, 2026, and published it in the Federal Register on April 10. The proposal would require issuers under its supervision to meet standards covering reserve assets, redemption within two business days, capital, risk management and custody. The OCC issued its own proposal on February 25, followed by customer identification rules proposed by five federal agencies on June 18. Final rules had yet to be issued by the July 18 statutory deadline.

The GENIUS Act, passed in 2025, established a federal regulatory framework for payment stablecoins in the United States, shifting attention to how issuers will meet their anti-money-laundering obligations. Stablecoins can move quickly across borders and, without adequate identity checks, could be used for money laundering or terrorist financing. Whether issuers must identify customers in the same way as banks will therefore help determine the regulatory standard applied to crypto assets.

The latest draft, jointly proposed by regulators including the Federal Reserve and the Federal Deposit Insurance Corporation, would require stablecoin issuers to establish customer identification programs under the Bank Secrecy Act and collect and verify users' identities. The standards would be aligned with those for regulated banks. The proposal is an implementing measure for the 2025 GENIUS Act and remains at the proposal stage, with no final effective date. Reports also did not disclose any amounts involved.

U.S. President Donald Trump signed the GENIUS Act into law on July 18, 2025, creating the first federal framework for payment stablecoins, with requirements covering reserves, redemptions and anti-money-laundering controls. The law also preserves a state regulatory pathway. Issuers with aggregate circulation of no more than $10 billion may opt for state oversight if the state regime is substantially similar to the federal framework and receives approval from the Stablecoin Certification Review Committee.

The U.S. Treasury Department proposed its first implementing rules on April 1, 2026, setting out principles for assessing whether state regimes are substantially similar to the federal framework. The proposal was published in the Federal Register on April 3, opening a 60-day comment period that ran through June 2. On June 16, a bipartisan group of senators including Cynthia Lummis again urged the Treasury to specify the process and timeline for states to seek certification on an ongoing basis, preventing state oversight from being rendered ineffective.

The US president signed the GENIUS Act on July 18, 2025, establishing the first federal regulatory framework for payment stablecoins. These tokens are typically backed by US dollar assets and used for transfers and settlement. The new regime will shape competition between banks and crypto companies, while also affecting holders’ redemption rights and the development of the dollar-based payments system.

The Office of the Comptroller of the Currency unveiled proposed rules on July 17, 2026, requiring each $1 of payment stablecoins to be backed by at least $1 in eligible reserve assets. The proposal also sets risk-management, custody and operational standards. Designed to implement the GENIUS Act, the draft must still undergo public consultation and final rulemaking.