Key Highlights
- Circle pushed for “same activity, same rules” under the GENIUS Act, with uniform standards for all payment stablecoins.
- The company suggested full backing, separate custody, redemption at par, and public audits to protect users.
- Circle asked for global interoperability and recognition of foreign issuers that meet GENIUS standards.
Digital-payment firm Circle has urged the U.S. Department of the Treasury to establish clear and uniform rules for payment stablecoins under the newly enacted Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).
In a detailed letter submitted on November 4, 2025, the issuer of USDC outlined its recommendations on how the Treasury should implement the law, aiming to protect consumers while fostering innovation.
The GENIUS Act was signed into law earlier this year, marking the first comprehensive federal framework for stablecoin regulation in the United States.
Trump’s GENIUS Act sets federal stablecoin rules
The GENIUS Act represents a historic step toward regulating stablecoins at the federal level. The law was designed to end years of fragmented oversight across U.S. states and agencies by creating a single national regime for payment stablecoins—digital tokens pegged to the U.S. dollar for transactions and settlements.
At the signing, Trump said the law would secure America’s leadership in digital finance, emphasizing its role in keeping the U.S. competitive amid China’s and Europe’s rapid progress in digital currency development.
The Act authorizes the Treasury and banking regulators to establish detailed rules on stablecoin reserves, redemption, consumer protections, and cross-border operations. Supporters say it provides long-awaited clarity, while critics warn that uneven enforcement could allow certain issuers to skirt oversight.
Circle’s call for strong consumer protections
In its submission, Circle emphasized the need to protect customer funds with simple, strong rules. The company proposed that every payment stablecoin be fully backed with cash or high-quality liquid assets, segregated from company money, and redeemable at par value upon demand.
In a separate submission this week, leading crypto exchange Coinbase also urged the Treasury to ensure that implementing regulations strictly adhere to Congress’s original intent, warning that overreach could “stifle stablecoin innovation and adoption.”
To enhance transparency, Circle suggested monthly independent audits and plain-language public reports, which would enable users to check reserves at any moment.
The firm also supported a level playing field across all issuers—bank and non-bank alike—so that consumers face the same protections no matter who issues the token. Circle proposed a standalone issuer structure with robust staffing, operational controls, and oversight to meet the Act’s obligations effectively.
Interoperability and global cooperation framework
Circle’s letter urged the Treasury to create a reciprocal global framework that recognizes foreign jurisdictions meeting GENIUS standards. The company said the Treasury should publish which international regimes qualify, ensuring clarity and fairness for cross-border issuers.
By encouraging interoperability and global supervision, Circle believes U.S. stablecoins can remain competitive without creating regulatory loopholes.
The submission also tied global operations to liquidity management whereby businesses and payment platforms usually settle transactions in different time zones. Clear guidance, Circle said, would prevent payment fragmentation between banks, brokers, and exchanges.
“Same activity, same rules—no loopholes”
Reiterating one of its key principles, Circle stated that “If a digital token walks and talks like a dollar, it should have the same obligations as a payment stablecoin under the Act.”
The company warned against regulatory arbitrage, where tokens designed to mimic stablecoins avoid oversight through labels or marketing. Rulemaking, it said, should close such gaps to preserve market integrity and consumer trust.
Circle also recommended that Treasury classify payment stablecoins as “cash and cash equivalents” for accounting and tax purposes. The move would align financial reporting with their fully reserved model, easing compliance for corporate treasurers and auditors.
Industry and banking groups weigh in
Circle’s recommendations come as several major financial associations, including the Bank Policy Institute, American Bankers Association, and Financial Services Forum, filed joint letters to Treasury the same week.
These groups echoed Circle’s call for consistent rules but also cautioned that poorly designed regulations could expose consumers or destabilize credit markets.
Community banks expressed concern that if stablecoins grow too rapidly under light regulation, they could pull deposits away from smaller banks and tighten credit for local borrowers.
In the meantime, the proponents of the crypto industry believe that the GENIUS Act would finally introduce some stability and legitimacy to the industry and allow innovation to flourish in a well-defined environment.
A turning point for the U.S.
Before the GENIUS Act, stablecoin oversight in the U.S. depended on a mix of state-level licenses, limited federal guidance, and case-by-case enforcement. The new legislation is meant to bring this patchwork to one national framework, something that industry players such as Circle have been longing to see.
For the company, whose USDC token already functions under stringent reserve and transparency rules, the legislation provides a pathway to a higher level of regulatory confidence and trust among the population.
The GENIUS Act’s emergence establishes the U.S. as a key player in setting global digital asset standards. Circle’s demand for reciprocity and joint oversight highlights the central challenge for regulators worldwide: how to ensure monetary stability and integrity in an increasingly digitized global payment system.
Looking ahead: Impact on stablecoin future
With the Treasury now working on more specific rules under the GENIUS Act, the letter by Circle may influence how regulators strike the balance between innovation and safety.
A properly tuned regime would enhance consumer confidence, and institutional players may be drawn, but ill-constructed rules may cause fragmentation or suffocation of competition.
The outcome will not only define the future of U.S. dollar-backed stablecoins but also influence global digital payment systems.
The submission by Circle, which is based on the principles of transparency, accountability, and interoperability, highlights the bigger question that regulators around the world have, which is how to ensure the stability of money in a more digital age.
