U.S. Treasury Unveils Hybrid Stablecoin Rulebook, Setting $10B Federal Oversight Trigger

The U.S. Department of the Treasury has moved from legislative planning to rulemaking on stablecoins, publishing its first proposed regulation under the GENIUS Act and launching a 60-day public comment period. The notice of proposed rulemaking (NPRM) lays out how payment stablecoin issuers could operate under either a federal supervisory framework or qualifying state-level regimes. The proposal centers on a dual-track model. Issuers with less than $10b in outstanding stablecoins would be allowed to choose state supervision, but only where the state regime is deemed "substantially similar" to federal standards. Treasury emphasizes that "substantial similarity" is not a carve-out from key safeguards: state regimes must "meet or exceed" federal requirements on reserve backing, anti-money laundering compliance, and consumer protections. Limited customization may be permitted in areas such as capital requirements, provided outcomes remain equally stringent. A structural threshold is built into the framework. Once an issuer surpasses $10b in supply, it would shift toward federal supervision, with the Office of the Comptroller of the Currency (OCC) positioned as the primary regulator. Treasury repeatedly ties the federal benchmark to OCC rules and interpretations, signaling a longer-term path toward a unified national framework for larger issuers. Treasury also targets regulatory arbitrage. By requiring state regimes to stay closely aligned with federal standards, the proposal aims to reduce incentives for issuers to shop for weaker jurisdictions. State rules would need to remain consistent with federal law and could not weaken core protections such as reserve composition or disclosure frequency; departures that dilute standards would not satisfy the "substantial similarity" test. More broadly, the NPRM reflects the continued shift toward treating stablecoins as financial infrastructure rather than experimental assets. Provisions on custody, insolvency treatment, and supervision resemble traditional banking safeguards, including prioritizing stablecoin holders in insolvency scenarios. Final Summary Treasury's proposal sets a federal floor that limits state-level flexibility and seeks to curb regulatory arbitrage. Smaller issuers may operate under qualifying state regimes, while growth beyond $10b would likely move them under federal oversight led by the OCC.