Circle Advocates for Uniform Regulations on Stablecoins with the GENIUS Act

Circle has engaged with the U.S. Department of the Treasury by submitting a comment letter in response to the Advance Notice of Proposed Rulemaking regarding the GENIUS Act. The letter outlines a proposed national framework for payment stablecoins and emphasizes how consistent regulations can benefit users, issuers, and intermediaries within U.S. markets.

Key Takeaways

Unified Framework: Circle seeks a regulatory structure that applies to both U.S. and foreign stablecoin issuers under the GENIUS Act.
Consumer Protection: The recommendations focus on safeguarding consumer funds through clear reserve, redemption, and disclosure standards.
Level Playing Field: Circle emphasizes equal regulations for bank and nonbank issuers to foster fair competition.
Global Operations: The letter urges clarification on how U.S. issuers can operate internationally and maintain liquidity.
Accounting Standards: Circle advocates for stablecoins to be treated as cash for accounting and tax purposes, ensuring financial clarity.

Regulatory Proposal for Stablecoins

Circle’s comment highlights that payment stablecoins should be fully backed by cash and high-quality liquid assets. These assets must be kept separate from company funds, ensuring they are redeemable at face value upon request. To facilitate transparency, independent monthly checks and straightforward reports should be provided, enabling users and regulatory bodies to confirm the backing.

The company connects these guidelines to establishing a level playing field for both bank and nonbank issuers, governed by a shared prudential standard. They also propose a distinct issuer framework equipped with the necessary staffing and controls to fulfill obligations under the GENIUS Act.

Furthermore, the letter calls for a reciprocal arrangement for foreign issuers that meet GENIUS standards and are under continuous oversight. Circle suggests that regulatory decisions be made public, allowing market participants to identify which international issuers qualify for compliance.

Circle expresses support for predictable penalties and safe harbor provisions that protect entities striving to comply with lawful directives. They also recommend having tested plans in place to ensure swift and equitable returns of customer funds across borders.

The letter firmly states, “Same activity, same rules—no loopholes. If a digital token behaves like a dollar, it should adhere to the same requirements as a payment stablecoin under the Act. Labels or marketing should not let anyone evade essential safeguards.”

Market Considerations and Global Compliance

In addition to the regulatory framework, Circle calls on the Treasury to clarify how authorized U.S. issuers can function on a global scale. This clarity is crucial for facilitating smooth conversions between U.S. dollars and tokens, especially for businesses operating across different time zones.

The proposal emphasizes the importance of liquidity management and the interoperability of regulated financial systems so that payment operations remain seamless across banks, brokers, and exchanges.

Moreover, Circle recommends that payment stablecoins be classified as cash and cash equivalents regarding accounting and taxation. This classification aligns financial reporting with the fully reserved model, reducing confusion for treasurers and auditors.

Finally, Circle urges clear guidance that extends GENIUS obligations to any token designed to maintain a stable value in financial transactions. This includes products that may restrict redemption but function similarly to compliant payment stablecoins, ensuring that consumer protection and market integrity are not merely dependent on labels.