Circle has submitted a comment letter to the U.S. Treasury proposing that any token which behaves like a dollar payment instrument should be subject to the same regulatory obligations under the GENIUS Act—whether issued by a bank, tech company or foreign entity.
In its submission, Circle emphasises that for stablecoins used as payment, the standard must be clear: full backing with cash or high-quality liquid assets, redemption at par on demand, separation of reserves from company funds and independent attestation. It argues that these obligations should apply universally—whether the issuer is a bank or a non-bank, domestic or foreign. By stating “same activity, same rules—no loopholes,” Circle underlines the risk of regulatory arbitrage if some issuers can mimic stablecoins without adhering to rigorous supervision.
The firm also recommends that foreign issuers wishing to access U.S. markets must meet the same standards and be subject to oversight, with decisions published to highlight which external regimes qualify. This global reciprocity is crucial to avoid fragmentation of standards, especially as payment stablecoins become more cross-border in nature. Furthermore, Circle calls for predictability in the rule-enforcement regime: safe harbour protections for good-faith compliance, clear penalties for breaches, and tested wind-down plans to protect users in a failure scenario.
Level playing field and consumer protection in the stablecoin regime
From a strategic standpoint, Circle’s stance serves two functions. First, it supports its own business model—which issues a prominent dollar-backed stablecoin—by advocating for rigorous but uniform rules that promote public trust. Second, it helps shape the competitive landscape: by pushing for equal treatment, Circle seeks to ensure that smaller fintech-issuers or foreign entrants do not gain regulatory advantage by sidestepping prudential standards.
However, the implementation challenges are real. Establishing global equivalence, supervising cross-border issuers, and enforcing redemption rights on demand are operationally complex. Moreover, the Treasury and other regulators must balance innovation in digital payments with financial stability and consumer protections.
In summary: Circle’s call for uniform regulation under the GENIUS Act marks a defining moment in stablecoin policy. How regulators respond will shape the architecture of digital payments for years to come.
