Circle Pushes for Strong Rules with GENIUS Act Implementation

TLDR

• Circle calls for equal rules for all stablecoin issuers under the GENIUS Act.
• Firm pushes full asset backing and monthly audits to protect consumers.
• Circle seeks fair competition through global regulatory reciprocity.
• Strong insolvency and safe harbor rules key to stablecoin trust.
• Transparency and accountability at the heart of digital dollar reform.

The GENIUS Act implementation has entered a pivotal stage as major stablecoin issuers push for robust regulatory clarity. Circle submitted its second round of public comments urging the U.S. Treasury to enforce consistent, transparent rules for the digital dollar landscape. The company emphasized a national framework that balances innovation, safety, and global interoperability.

Circle Supports a Level Regulatory Playing Field

Circle called for equal treatment of bank and nonbank stablecoin issuers under the GENIUS Act implementation framework. It recommended uniform standards for all issuers to prevent regulatory gaps that could harm market integrity or consumer safety. Additionally, Circle argued that clear enforcement mechanisms must deter noncompliance and uphold Congressional intent.

To support competition, Circle suggested consistent market access requirements across domestic and foreign issuers. It also urged reciprocal supervision agreements with trusted jurisdictions to prevent offshore arbitrage and regulatory avoidance. The company stressed the need for transparent criteria to evaluate foreign frameworks under the Act.

Circle’s proposal includes requiring all issuers to maintain standalone operational entities with full risk management and compliance resources. This measure would reduce systemic vulnerabilities and ensure accountability in both regular and stressed conditions. The GENIUS Act implementation, Circle believes, must raise the bar for stablecoin oversight without stifling growth.

Strong Consumer Protections and Asset Backing at the Core

Circle urged the Treasury to mandate that all payment stablecoins be fully backed by cash and high-quality liquid assets. It proposed strong custody rules to separate customer funds from company reserves, ensuring easy redemption at par. Monthly third-party audits and plain-language disclosures should verify these assets and bolster public trust.

Under the GENIUS Act implementation, Circle asked for specific rules that block issuers from avoiding redemption rights while claiming full backing. Any digital asset mimicking stablecoin functionality must comply with the law’s strict standards regardless of labels or marketing strategies. This would stop regulatory loopholes and protect users.

Circle also highlighted the need for structured insolvency plans. It advocated for wind-down mechanisms that guarantee fast, fair customer redemptions even across borders. These plans should follow international norms and ensure cross-border cooperation during issuer failures.

International Standards and Safe Harbor Enforcement Measures

Circle emphasized the importance of safe harbor provisions for issuers that comply in good faith with lawful enforcement orders. These protections should encourage timely cooperation without penalizing transparency or compliance efforts. Such provisions must extend internationally through coordinated agreements.

The GENIUS Act implementation should also define accounting treatments for payment stablecoins, aligning them with cash equivalents. This clarity would promote stablecoin usage in trade, commerce, and capital markets by reducing reporting uncertainty. Circle urged regulators to support financial consistency across all sectors.

Circle proposed the creation of a public list of approved foreign issuers and comparable jurisdictions. This tool would enhance interoperability, ensure market transparency, and guide issuers and users through a compliant ecosystem. The GENIUS Act implementation must reflect a coordinated, risk-sensitive, and innovation-friendly strategy.

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