New York wants to add a GENIUS Act restriction on big tech stablecoin issuers into its own rulebook. The GENIUS Act became the first United States federal law regulating stablecoin payments w
New York wants to add a GENIUS Act restriction on big tech stablecoin issuers into its own rulebook.
The GENIUS Act became the first United States federal law regulating stablecoin payments when it was signed in July 2025. It sets reserve, disclosure, and licensing rules for who can issue dollar-backed digital tokens.
Now, the New York State Department of Financial Services proposed new regulations on June 9 that would align the state's stablecoin regime with the federal framework.
Among them is a rule that draws a line between stablecoins and big tech firms.
Related: Meta unveils a surprising new way to pay creators in stablecoins
As per the GENIUS Act, a public company that is not predominantly engaged in financial activities, along with its subsidiaries and affiliates, cannot apply to issue a payment stablecoin.
But the restriction is not absolute. Such a company can still issue if it secures a unanimous vote from the federal Stablecoin Certification Review Committee, made up of the Treasury Secretary, the Federal Reserve chair, and the head of the Federal Deposit Insurance Corporation.
The proposal by New York wants to pick this up. As per the Section 202.3(b) of the proposed rule,
"...a public company... that is not predominantly engaged in one or more financial activities...of the GENIUS Act...and its wholly or majority owned subsidiaries or affiliates, shall not be eligible to apply for approval to issue a payment stablecoin except as provided in section 4(a)(12) of the GENIUS Act."
While the proposal itself doesn't spell out the committee-approval workaround for these firms, it cross-references the federal provision under the GENIUS Act.
The provision is aimed at large commercial firms rather than banks or established financial players. Meta (NASDAQ: META), Amazon (NASDAQ: AMZN), and Walmart (NASDAQ: WMT) are some of the big tech companies that may be in the crosshairs.
Amazon and Walmart have reportedly explored issuing their own dollar-backed coins to cut payment-processing costs, though both have framed the talks as early.
Meta offers the cautionary precedent. Back in 2019, its Libra project, later renamed Diem, collapsed under regulatory pressure before launch.
In 2026, Meta rolled out paying select creators in Colombia and the Philippines using Circle's USDC stablecoin, requiring them to link third-party crypto wallets.
Senator Elizabeth Warren wrote to Mark Zuckerberg, calling Meta's lack of transparency "deeply troubling." She warned the plans could carry serious implications for competition, privacy, and financial stability.
A separate group including Apple (NASDAQ: AAPL), Google by Alphabet (NASDAQ: GOOGL), Airbnb (NASDAQ: ABNB), and Elon Musk's X reportedly looked at adopting existing stablecoins for payments rather than issuing their own.
Related: 'We don't want to be behind': U.S. lawmakers prioritize stablecoins in Congress
Beyond the big tech provision, the proposed rule would withdraw New York's landmark June 2022 stablecoin guidance and replace it with a formal regime. It would require one-to-one reserve backing held with a third-party custodian, separately identifiable reserves for each stablecoin brand, monthly reserve-composition reports with executive certifications, and redemption within two business days.
Issuers with $25 billion or more outstanding would have to hold a share of reserves of up to a $500 million cap in insured deposits at an insured depository institution.
The proposal also sets capital and operational-backstop requirements and gives existing New York-licensed issuers a year to comply.
A 10-day preliminary comment period is underway, followed by a 60-day window once the rule is published in the State Register.
Related: Markets surge as Clarity Act clears Senate committee in landmark 15-9 vote
