November 4, 2025

By electronic submission

U.S. Department of the Treasury,
Attention: Office of General Counsel,
1500 Pennsylvania Avenue NW, Washington, DC 20220.

RE: Advance Notice of Proposed Rulemaking on GENIUS Act Implementation (RIN 15050-ZA10)

To Whom It May Concern:

The Securities Industry and Financial Markets Association¹ and its Asset Management Group² (collectively, “SIFMA”) provide this letter in response to The Department of the Treasury (“Treasury”) advance notice of proposed rulemaking (“ANPRM”) 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 we see 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.

I. Executive Summary

This letter responds to select ANPRM questions and is organized around several core recommendations that SIFMA believes should guide Treasury’s rulemaking:

• Clear Scope, Safe Harbors, and Transition Mechanisms: Treasury should provide early regulatory clarity on the reach of Section 3 and adopt limited safe harbors for (i) offshore issuances that do not target U.S. persons; (ii) non-USD stablecoins used for legitimate cross-border, FX, or tokenized-asset settlement; and (iii) de minimis test transactions. Guidance should also clarify when a person is “issuing in the United States” or offering to a U.S. person and ensure a reasonable conformance period before penalties attach.
• Functional and Proportionate Definitions: The definitions of “payment stablecoin,” “digital asset,” and “digital asset service provider” (“DASP”) should be activity-based and technology-neutral. Treasury should confirm that digital-asset references encompass both public and permissioned ledgers, and that exemptions for software developers, protocols, and self-custody are applied narrowly and functionally — capturing within the regulatory perimeter entities that exercise control or earn fees, while preserving true peer-to-peer and open-source activity.
• Reserve and Custody Standards: SIFMA supports robust reserve requirements for permitted payment stablecoin issuers (“PPSIs”) but urges flexibility to hold reserves in a diversified set of high-quality, liquid assets. Treasury should work with Congress and other regulators to clarify that (a) SEC Rule 2a-7 Treasury money-market funds, (b) overnight and intraday Treasury-backed repos, (c) deposits at U.S. branches of foreign banks may qualify as eligible reserves. All reserve assets should be held in custody or safekeeping subject to established segregation, control, and audit standards harmonized with existing custody frameworks.
• Accounting and Collateral Treatment: Treasury should encourage the Financial Accounting Standards Board (“FASB”) to treat permitted payment stablecoins as cash equivalents for accounting purposes, and to ensure that permitted payment stablecoins are recognized as eligible collateral across the CFTC, SEC, and banking rulebooks. Tokenized money-market funds and other tokenized Treasury instruments that confer identical legal rights should also receive equivalent treatment for margin and liquidity purposes.
• Restrictions on Non-Financial Issuers: SIFMA supports strict limits on non-financial firms (whether publicly traded or privately held) issuing payment stablecoins. The Stablecoin Certification Review Committee (“SCRC”) should evaluate a firm’s systemic importance, potential contagion risks, conflicts of interest, and governance / risk management to ensure that any exemptive relief does not negatively impact financial stability or consumers.
• Federal-State Comparability: SIFMA supports the dual federal and state pathways for PPSIs, provided all issuers are subject to the “same risk, same activity, same regulatory outcome” standard. Treasury should interpret the “substantially similar” and “meets or exceeds” standards as part of a single, sequenced process and adopt a principles-based framework emphasizing prudential safeguards, resolution and resiliency planning, consumer and investor protection, and anti-money laundering / countering the financing of terrorism (“AML/CFT”) compliance. Treasury should also clarify that the $10 billion threshold for federal oversight applies on an aggregate, group-wide basis to prevent arbitrage through multi-entity structuring.
• Cross-Border Framework and Foreign Regime Comparability: Treasury should implement the international provisions of Section 18 to promote regulatory alignment, avoid duplicative supervision, and reinforce the dollar’s central role in global stablecoin markets. Specifically, SIFMA recommends:
  • Outcomes-based comparability: Treasury should apply a risk-sensitive, outcomes-focused standard that assesses whether a foreign regime achieves substantially similar investor-protection, prudential, and supervisory outcomes—not a line-by-line legal match. The foreign-bank branch model under the International Banking Act and the Federal Reserve’s Regulation K offers a useful precedent, balancing consolidated home-country supervision with U.S. oversight and cooperation.
  • Core comparability factors: Eligible regimes should require 1:1 high-quality liquid reserves held in custody; enforce redemption at par and segregation of customer assets; impose prudential capital, liquidity, and governance requirements; mandate ongoing supervision and enforcement authority; and ensure anti-financial crimes compliance comparability to U.S. standards.
  • Macroeconomic impact: Treasury should account for the broader implications of comparability determinations on U.S. Treasury-market demand. A flexible, cooperative approach could encourage foreign issuers to hold reserves in U.S. Treasuries, reinforcing dollar primacy and market depth.
  • Reciprocity and interoperability: Treasury should view interoperability under Section 18(d) as the ability of compliant payment stablecoins to transact and redeem seamlessly across jurisdictions. Standards around interoperability should also guard against anti-competitive “walled-garden” ecosystems that would prevent U.S. consumers or businesses from transferring, redeeming, or converting between compliant U.S.-dollar stablecoins. When Treasury enters reciprocal arrangements under Section 18, interoperability should be a factor in those determinations, but detailed technical standards should be left to industry bodies to update as appropriate over time.
• Tax Treatment and Clarity: Treasury and the IRS should clarify that transactions in permitted payment stablecoins are treated as cash equivalent transactions, not property dispositions, and issue guidance aligning with existing broker-reporting and wash-sale rules. This would eliminate unnecessary gain / loss recognition and facilitate widespread use of permitted payment stablecoins in payments and settlement.
• Additional Implementation Priorities: Treasury should coordinate with the banking agencies to clarify bank-permissible activities in digital-asset markets and establish clear parameters for staking participation by regulated financial institutions—both essential for supporting the secure scaling of tokenized and payment-stablecoin infrastructure. Regulations clarifying permissibility should also duly take into account foreign banks operating in the U.S. through branches.

1. 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 nearly 1 million employees, we advocate for 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. [↩]
2. SIFMA AMG brings the asset management community together to provide views on policy matters and to create industry best practices. SIFMA AMG’s members represent U.S. and multinational asset management firms whose combined global assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds. [↩]