Senator Bill Hagerty’s GENIUS Act has moved into a critical rulemaking phase, with the Blockchain Association formally urging federal regulators to adopt clear, coordinated rules for stablecoin issuers. The legislation, signed into law earlier this year, is designed to reinforce U.S. dollar dominance in the digital economy while creating structural demand for U.S. Treasuries.
The Blockchain Association submitted a comment letter to the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corp. (FDIC) following the Treasury Department’s release of draft implementing rules. The industry group argued that overlapping or burdensome regulations could stifle innovation and drive stablecoin activity offshore.
One of the group’s central recommendations is to limit Know Your Customer (KYC) obligations to the direct relationship between stablecoin issuers and their customers, rather than applying them to every secondary market transaction. This reflects a broader push for a streamlined regulatory environment that supports efficiency, particularly for smaller users and payment use cases.
The GENIUS Act — formally the Guiding and Establishing National Innovation for U.S. Stablecoins — establishes a federal framework for payment stablecoins. It requires issuers that wish to operate in the United States to obtain authorization at either the federal or state level and restricts circulation of stablecoins from overseas issuers that fail to meet compliance standards. Senator Hagerty has emphasized that the downstream effects could lower borrowing costs for American citizens by boosting demand for U.S. Treasuries.
The rulemaking outcome will directly affect how stablecoins are issued, used, and accessed by U.S. consumers and businesses. Regulators will now review public comments before finalizing the rules. Although no specific timeline has been announced, the process is expected to shape the future of digital payments and the competitive position of U.S. dollar stablecoins globally.
