Washington, D.C., November 5, 2025 —SIFMA and SIFMA AMG today submitted a letter in response to The Department of the Treasury advance notice of proposed rulemaking requesting comment on questions relating to the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.

SIFMA supports the GENIUS Act’s creation of a new regulatory framework for payment stablecoins, which it sees as a critical step in the development of mature digital asset markets, including markets for tokenized securities and other tokenized assets. It is critical that the GENIUS Act be implemented in a manner that protects consumers and investors; mitigates potential risks to the markets and broader financial system; minimizes opportunities for regulatory arbitrage; and promotes responsible innovation, ensuring continued U.S. leadership in the digital assets ecosystem.

“Treasury’s approach to stablecoin regulation will shape the foundation of the future digital financial system,” said SIFMA president and CEO Kenneth E. Bentsen, Jr.  “Our recommendations seek to balance innovation and financial stability by providing clear definitions, consistent oversight, and strong safeguards for investors, consumers, and markets.”

SIFMA’s recommendations include the following key principles:

Clear Scope, Safe Harbors, and Transition Mechanisms: Treasury should provide early regulatory clarity on the reach of Section 3 and establish limited safe harbors for offshore issuances, non-USD stablecoins used for legitimate cross-border or settlement purposes, and de minimis test transactions. Guidance should also define when an entity is “issuing in the United States” or “offering to a U.S. person,” with reasonable transition periods before enforcement.

Functional, Proportionate Definitions: Definitions of “payment stablecoin,” “digital asset,” and “digital asset service provider” should be activity-based and technology-neutral. Exemptions for software developers, protocols, and self-custody should be narrowly applied to preserve true peer-to-peer and open-source innovation while capturing entities that exercise control or earn fees.

Reserve and Custody Standards: SIFMA supports strong reserve and transparency standards for permitted payment stablecoin issuers (PPSIs), while allowing flexibility to hold diversified high-quality liquid assets such as Treasury money-market funds, Treasury-backed repos, and deposits at U.S. branches of foreign banks. Reserve assets should be subject to established custody and audit controls consistent with SEC frameworks.

Accounting and Collateral Treatment: Treasury should work with the Financial Accounting Standards Board to classify permitted payment stablecoins as cash equivalents and work with other regulators to ensure they are considered eligible collateral for margin purposes. Equivalent treatment should extend to tokenized money-market funds and tokenized Treasury instruments.

Restrictions on Non-Financial Issuers: SIFMA supports strict limits on non-financial firms issuing payment stablecoins and recommends that the Stablecoin Certification Review Committee assess systemic, governance, and contagion risks before granting exemptions.

Federal-State and Cross-Border Consistency: SIFMA supports a dual federal-state pathway for PPSIs based on the principle of “same risk, same activity, same regulatory outcome.” Treasury should interpret comparability standards through a principles-based lens emphasizing prudential safeguards, consumer protection, and AML/CFT compliance, while applying the $10 billion oversight threshold on a consolidated, group-wide basis.

International Alignment: SIFMA urges Treasury to apply outcomes-based comparability when assessing foreign regimes under Section 18, focusing on comparable prudential and supervisory outcomes rather than legal form. SIFMA also recommends reciprocity and interoperability standards that prevent anti-competitive practices and reinforce the dollar’s central role in global markets.

Tax Clarity: Treasury and the IRS should confirm that transactions in permitted payment stablecoins are treated as cash equivalents, not property transactions, eliminating unnecessary gain/loss recognition and facilitating widespread use in payments and settlement.

Implementation Priorities: Treasury should coordinate with banking regulators to define permissible bank activities in digital-asset markets and provide clear parameters for staking by regulated financial institutions—both critical for the secure growth of tokenized financial infrastructure.

The full letter is available here.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development.  SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).