Banks, state supervisors and UK Finance call for tougher reserve checks, clear AML responsibilities, longer timelines and cross-border recognition as Treasury turns the GENIUS Act from statute into enforceable rules.
Early feedback on the US Treasury’s GENIUS Act zeroes in on two loopholes: “interest by proxy” and claims that hint at a US government guarantee.
First State Bank & Trust says stablecoin issuers should not be able to pay interest indirectly through affiliates or agents, and that the ban on implying any US backing should also cover those partners (user-provided submission).
UK Finance makes a similar point. It warns that prizes, bonuses or other third-party rewards could look like interest unless the rule is written more clearly.
The GENIUS Act, passed in July 2025, is the first US law for payment stablecoins. It requires full, safe reserves, one-to-one redemption at face value and no interest. The US Treasury began turning the law into rules on September 19, and extended the comment period because of the number of issues raised.
As the comments roll in, several submissions say audits and self-reports are not enough. First State Bank & Trust argues examiners should regularly check issuers’ reserves, where those assets are held in the US, and whether liquidity is adequate – and that this supervision should also reach relevant affiliates (user-provided submission).
Anti-money laundering is another pressure point. Industry supports tough rules but wants the roles spelled out. UK Finance asks Treasury to make clear who is responsible at each step – issuers, custodians, wallets and other service providers – and how far “up the chain” firms must look in different use cases. The aim is certainty about who screens which customers and transactions.
A coalition of banking trade groups — including the ABA, BPI, ICBA, CBA, CDBA, NBA, The Clearing House and America’s Credit Unions — also put process in focus. A submission from the American Bankers Association says a 30-day window is too short to answer nearly 60 questions and asks for a total of 90 days from publication to give fuller, data-driven responses.
State supervisors take a similar line: the Conference of State Bank Supervisors requests at least 30 extra days, citing the work needed to judge when a state regime is “substantially similar” to a federal model and how the two should interact.
Cross-border rules feature heavily in the international feedback. UK Finance urges Treasury to use the Act’s recognition tools so overseas issuers from “comparable” regimes can operate in the US without duplicative rules. It suggests prioritising a UK determination once the UK regime is live and adopting an outcomes- or risk-based test for “comparable effect,” pointing to the UK’s Overseas Recognition Regimes as a template. UK Finance adds that early, transparent determinations would cut long-run costs for compliant issuers and signal global alignment on standards.
Two practical ideas could shape the final rulebook. First, consider explicit timelines for par redemption to reinforce the money-like design. Second, be cautious about multi-currency-referenced tokens in regimes that allow them, because of FX and confidence risks unless hedged carefully. (GENIUS itself limits reference to one national currency.)
Taken together, the submissions point Treasury toward a stricter perimeter — ban interest by proxy, police marketing across affiliates, back reserve rules with real exams — and toward clearer AML role-setting.
They also highlight a process issue; with sweeping questions on supervision, state–federal interaction and international comparability, several groups argue that more time upfront will reduce gaps late
