U.S. States Can Regulate Stablecoins Up to $10B With Federal Approval

The Treasury Department published an interim final rule establishing the certification process required by the GENIUS Act. Under the framework, a state-qualified payment stablecoin issuer with no more than $10 billion in consolidated outstanding issuance can choose state regulation if the state’s regime is judged substantially similar to the federal framework.

That makes $10 billion one of the most important dividing lines in the emerging U.S. stablecoin market.

States Need Federal Approval First

A state cannot simply create its own stablecoin rules and start supervising issuers.

Its regulator must submit a certification to the Stablecoin Certification Review Committee, including a detailed explanation of how its laws, regulations and enforceable guidance meet federal standards. The committee is chaired by the Treasury secretary and also includes representatives from the Federal Reserve and FDIC.

Approval of an initial certification requires a unanimous determination that the state framework meets or exceeds the GENIUS Act’s standards. States must then submit annual recertifications.

The structure builds on the broader U.S. stablecoin framework, which is increasingly pulling stablecoin issuers toward bank-style supervision and compliance.

$10B Could Become a Regulatory Turning Point

The threshold matters because it creates different regulatory paths depending on issuer size.

Smaller issuers may be able to remain under an approved state regime, while larger stablecoin businesses will eventually need to transition away from that state-only pathway. Treasury’s rule explicitly requires state frameworks to include procedures for transition to federal oversight.

That could make regulatory scale itself part of a stablecoin company’s growth strategy.

A firm approaching $10 billion in outstanding tokens would no longer be thinking only about reserves, distribution and payments. It would also need to prepare for a potentially different supervisory regime.

Coinpaper’s explainer on stablecoin reserves shows why this matters: once issuers reach multi-billion-dollar scale, reserve management, redemption liquidity and custody become systemically more important.