Treasury’s First GENIUS Act Rule Draws a $10 Billion Line for State Stablecoin Issuers

The U.S. Treasury has published its first rule implementing the GENIUS Act, and while it is procedural on paper, it draws one of the most consequential lines in the stablecoin market: a $10 billion ceiling that decides whether an issuer can stay under a state regulator or must answer to Washington.

The interim final rule, published in the Federal Register on September 30, 2026, sets out the forms and procedures the Stablecoin Certification Review Committee will use to approve or deny state-level stablecoin regimes. It took effect the same day, and public comments are open until November 30, 2026.

What the Stablecoin Certification Review Committee does

The GENIUS Act created a three-member committee to act as a gatekeeper for state stablecoin oversight. It is chaired by the Treasury Secretary and also includes the Chair of the Federal Reserve and the Chair of the FDIC. Its job is to decide whether a state’s payment stablecoin rules are “substantially similar” to the federal framework.

Under section 4(c) of the Act, a state-qualified payment stablecoin issuer with no more than $10 billion in consolidated outstanding stablecoins can opt for state regulation instead of federal oversight, but only if its state regulator has submitted a certification and the committee has approved that state’s regime. The new rule prescribes what that certification must look like and how the committee processes it.

Published, but not open for business yet

There is an important catch. Although the rule is in effect, the committee will not accept certifications until the information collection clears Paperwork Reduction Act approval. Treasury has said it will post a notice on its website once submissions open. States face a deadline of January 18, 2028 for initial certifications, according to reporting on the rule.

That timeline has made state regulators uneasy. Ledger Insights noted that the substantive criteria for what counts as “substantially similar” are still only a proposal, following an earlier Treasury proposal that drew pushback from state officials who worry about federal standards being imposed on their regimes. In practice, states are being asked to build toward a target that has not been finalized.

The $10 billion line, explained

The threshold effectively splits the stablecoin market in two:

• Issuers under $10 billion can pursue a state pathway, provided their home state’s regime passes the committee’s review.
• Issuers above $10 billion are excluded from the state option and, according to coverage of the rule, must transition to the federal framework within 360 days unless they obtain a waiver.

For the largest dollar stablecoins, the state route is effectively off the table. Analysis of the rule points out that the biggest issuers, such as Circle and Tether, sit far above the cap, and Tether, as a non-U.S. entity, would not qualify for the section 4(c) state option in any case. The real audience for this rule is the long tail: smaller issuers, fintechs and bank-adjacent projects that want a state charter rather than a federal one.

That long tail is growing. As we discussed in our analysis of Stripe’s Open USD and the stablecoin distribution fight, new entrants are competing hard for market share, and many of them will start well below the $10 billion mark. For those issuers, which regulator they answer to could shape their costs, product scope and speed to market.

Banks are watching for regulatory arbitrage

Not everyone is comfortable with a dual-track system. The American Bankers Association has flagged concerns that state-certified frameworks could give issuers broader operating latitude than federal rules, opening the door to regulatory arbitrage. That tension, between states eager to attract fintech business and banks wary of an uneven playing field, is likely to show up in the comment letters due by November 30.

Part of a crowded regulatory calendar

The Treasury rule lands in a busy stretch for U.S. crypto policy. The SEC is collecting feedback on its own sweeping proposal, which we covered in our explainer on the SEC’s Regulation Crypto Assets and its October 20 comment deadline, and the agency has also proposed dedicated custody standards for investment advisers and funds holding crypto. Meanwhile, with broader market-structure legislation stalled, regulators are increasingly filling gaps through rulemaking and staff guidance rather than waiting on Congress.

Federal banking regulators also still need to finalize their own GENIUS Act implementing rules, which is part of why states say the certification timeline feels compressed.

What to watch next

• The Treasury notice announcing when the committee will begin accepting state certifications.
• The final “substantially similar” criteria, which will determine how much freedom states really have.
• Comment letters from state regulators, banks and issuers ahead of the November 30 deadline.
• Which states move first to seek certification once the process opens.

For everyday stablecoin users, little changes immediately. But the rule sets the plumbing for how smaller U.S. stablecoins will be supervised, and the $10 billion threshold will become a key milestone for any issuer that grows quickly.

This article is for informational purposes only and does not constitute financial advice.