Tiffany Smith (WilmerHale) speaks with Beth Haddock (Warburton Advisers) and Boaz Goldwater (Davis Polk) about Treasury’s notice of proposed rulemaking implementing the Genius Act’s framework for regulating payment stablecoins, focusing on guidance for state regimes to qualify as “substantially similar” to the federal approach.

This podcast episode from the City Bar’s Presidential Task Force on AI and Digital Technologies compares the dual federal/state structure to banking and securities regulation, and describes “uniform” requirements versus areas with limited state calibration (e.g., capital, liquidity, supervisory procedures). We discuss the inter-agency stablecoin certification review committee’s discretion, challenges from evolving OCC standards, and the ten billion outstanding issuance threshold that triggers transition to OCC supervision while retaining state oversight, with possible waivers for certain pre-existing state regimes. We highlight key ambiguities for issuers, including moving federal benchmarks, supervisory capacity, and unresolved capital/liquidity measurement issues.

01:38 Genius Act Rulemaking Overview 03:08 Dual Federal State Framework 04:17 Why a State Pathway 09:31 State Discretion in Practice 11:31 Managing Moving Goalposts 13:34 Certification Review Committee 15:56 Reserve Capital Liquidity Rules 19:05 Crossing the 10 Billion Threshold 23:42 Supervision and Enforcement Capacity 25:33 Choosing State vs Federal Oversight 28:20 Open Questions and Comment Priorities

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