Digital payments firm Circle has called on the U.S. Department of the Treasury to establish clear, uniform, and transparent regulations for stablecoins under the newly signed Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
In a formal submission on 4 November 2025, the issuer of USD Coin (USDC) proposed detailed measures to ensure that all payment stablecoins are held to the same high standards—protecting users while supporting innovation in the fast-growing digital finance sector.
Signed into law earlier this year by President Donald Trump, the GENIUS Act marked the first comprehensive federal framework for stablecoin regulation in the United States. It replaces years of fragmented state-level oversight with a national regime governing how payment stablecoins—digital tokens pegged to the U.S. dollar—are issued, backed, and redeemed.
The law empowers the Treasury and federal banking regulators to define rules around reserve assets, redemption rights, consumer protection, and cross-border operations. At its signing, Trump described it as a move to keep the U.S. competitive in the global race for digital currency leadership.
In its submission, Circle urged the Treasury to mandate full cash or liquid asset backing, segregated reserves, and redemption at par value on demand. The company said such measures would prevent misuse of customer funds and enhance confidence in digital dollars.
To ensure transparency, Circle proposed monthly independent audits and public reserve disclosures in plain language. The firm also advocated a level playing field between bank and non-bank issuers so that all stablecoin users enjoy equal protection.
Circle’s proposal includes creating standalone issuer entities with strict operational controls and oversight mechanisms to ensure accountability.
A similar letter from Coinbase urged the Treasury to maintain the GENIUS Act’s spirit of innovation, warning that regulatory overreach could “stifle stablecoin growth and adoption.”
Circle also called for a reciprocal international framework to recognise foreign jurisdictions that meet GENIUS standards. Such a move, the company said, would promote cross-border interoperability and fairness, ensuring stablecoins remain competitive without enabling regulatory loopholes.
The firm tied these principles to global liquidity management, noting that clear rules would reduce transaction delays and fragmentation between financial intermediaries operating across time zones.
Reinforcing one of its central arguments, Circle wrote:
“If a digital token walks and talks like a dollar, it should have the same obligations as a payment stablecoin under the Act.”
The company warned against regulatory arbitrage, where tokens resembling stablecoins escape scrutiny through marketing or technical loopholes. It also urged that payment stablecoins be classified as “cash and cash equivalents” for accounting and tax purposes, aligning with their fully reserved nature.
Circle’s position aligns with similar submissions from major financial associations such as the Bank Policy Institute, American Bankers Association, and Financial Services Forum. While these groups support consistent national standards, they also cautioned that excessive leniency could allow risky issuers to destabilise credit markets or divert deposits from smaller banks.
Crypto advocates, however, view the GENIUS Act as a breakthrough that legitimises the industry and provides the clarity needed for innovation to flourish.
Before the GENIUS Act, U.S. stablecoin oversight was a patchwork of state licences and scattered federal enforcement. For Circle, which already follows strict reserve and transparency standards, the law offers a clear path to stronger public trust.
As regulators begin drafting detailed rules, Circle’s submission could significantly shape how the U.S. balances innovation and consumer protection. The resulting framework will not only determine the future of dollar-backed stablecoins like USDC but also influence global digital payment systems.
In Circle’s words, the ultimate goal is simple: a transparent, interoperable, and accountable monetary ecosystem for the digital age.
