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As disclosed by recent comments during Congressional hearings,1 publication of proposed regulations by the federal financial regulators (including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration) implementing the Guiding and Establishing National Innovation for US Stablecoins Act (the GENIUS Act) is expected before December 31, 2025.2
Given that, by its stated terms, the GENIUS Act goes into effect on January 18, 2027, regardless of the adoption and effectiveness of final rules, it is likely that the comment period for the proposed rules will be particularly truncated. (Normal comment periods for significant rules are often 90 calendar days or more.) With a focus on permitted payment stablecoin issuers (PPSIs), the proposed regulations are expected to cover a broad swath of issues raised in connection with stablecoin issuance, including anti-money laundering and customer identification requirements that extend federal laws applicable to US financial institutions to PPSIs. Additionally, proposed rules will establish criteria for assessing the regulatory structures of state stablecoins used by certain smaller PPSIs.3
Upon release of the proposed regulations, Katten will undertake a fulsome review that includes our banking, crypto and securities lawyers. In particular, we will focus on market and compliance issues raised by the proposals that will pose challenges to stablecoin issuers, third-party vendors/contractors, merchants, and end-users.
We have a long history of assisting clients with the preparation of comment letters to federal agencies and look forward to developing comments for clients that reflect their specific business and broader market concerns.
Footnotes
1. See Federal Reserve Governor Michelle W. Bowman's comments to the Committee on Financial Services, US House of Representatives, December 2, 2025, available at: https://www.federalreserve.gov/newsevents/testimony/bowman20251202a.htm
2. See Katten's coverage of the GENIUS Act, available here.
3. Generally speaking, a PPSI operating pursuant to a state stablecoin license that exceeds $10 billion in stablecoin issuances will have to convert to a federal charter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
