Circle submitted a comment letter to the U.S. Department of the Treasury, responding to the Advance Notice of Proposed Rulemaking on the GENIUS Act. The filing outlines a national framework for payment stablecoins and describes how uniform requirements could support users, issuers, and intermediaries across U.S. markets. The letter presents its recommendations within a single regime that accommodates both permitted U.S. issuers and qualifying foreign issuers, while ensuring consumer funds are protected t ...

Core Viewpoint - Coinbase Global has urged the US Treasury Department to ensure that the upcoming rules for the GENIUS Act align with Congress's original intent to avoid excessive regulation that could hinder innovation in the crypto space [1][3][9] Regulatory Concerns - The exchange warned that excessive regulation could stifle innovation and undermine US leadership in the cryptocurrency sector [3] - Coinbase's Chief Policy Officer emphasized the need for regulations to adhere closely to the bill's text, ensuring US-issued stablecoins maintain their competitiveness as a global payment and settlement instrument [4] Scope of Regulation - Coinbase called for a narrow interpretation of the GENIUS Act, specifically excluding non-financial software developers, blockchain validators, and open-source protocols from regulatory oversight [4][9] - The company clarified that the prohibition on interest payments under the GENIUS Act applies only to stablecoin issuers, not to exchanges or intermediaries offering loyalty or rewards programs [5] Tax and Accounting Proposals - Coinbase proposed that payment stablecoins be recognized as cash equivalents for tax and accounting purposes, arguing that their design is similar to fiat currency [6] - The exchange urged the Treasury and the Internal Revenue Service to adopt a pragmatic approach to taxation for payment stablecoins to reduce the regulatory burden [6] Industry Impact - The GENIUS Act, enacted in July 2025, establishes the first federal framework for regulating stablecoins, requiring tokens to be fully backed by US dollars or equivalent liquid assets and mandating annual audits for large issuers [7] - Coinbase's comments reflect growing industry concerns regarding how the law's implementation could impact the balance between innovation, investor protection, and global competitiveness in the stablecoin sector [7][9] Position on Stablecoins - Coinbase rejected claims that the growth of stablecoins could deplete deposits from US banks, arguing instead that stablecoins reinforce the dollar's global dominance [8]