Circle Demands Regulatory Clarity in Landmark GENIUS Act Push

Crypto giant Circle throws weight behind GENIUS Act—because nothing says 'innovation' like begging bureaucrats for permission slips.

Subheader: The Regulatory Hunger Games

Stablecoin issuers enter Washington's arena as Circle lobbies for rules that won't strangle DeFi in its crib. No actual legislation drafted yet—just the usual political theater where 'urgent clarity' moves at DC molasses pace.

Subheader: The Irony of Centralized Decentralization

Company built on blockchain's trustless ethos now wants...trusted third parties? A masterclass in how even crypto rebels eventually cozy up to regulators—usually right after their ATH market cap.

Circle urges consistent rules across all stablecoin issuers

In its submission, Circle argued that stablecoins used for payments need to be fully backed by cash or high-quality, highly liquid short-term assets. This is intended to prevent stablecoins from losing value in times of financial crisis. The firm argued that clear backing rules are necessary to prevent risks from being imposed on ordinary people.

The rules, Circle added, should ensure that no one group receives more favorable treatment. Banks, non-bank providers of financial services that utilize technology, and finance companies whose stablecoins are available in US markets should all be subject to the same supervisory regime.

The company warned that inconsistent regulation could push risky stablecoin activity out of the United States and beyond the reach of overseers who are monitoring such products.

“Clear conditions of access to US markets, including shared supervision between the US and trusted foreign regulators, will foster competition while protecting against risks arising offshore,” the company said.

Circle also stressed the need for robust enforcement. It also stated that penalties for breaking the rules should be substantial enough to deter misuse and maintain confidence in digital assets. Without this, it argued, the aims of the GENIUS Act WOULD not be achieved.

Industry groups submit recommendations to the treasury

Circle wasn’t the only group that registered its comments. Coinbase also filed comments. The back and forth prompted the Treasury to clarify that a prohibition on paying interest on stablecoin balances should be limited to parties that issue the coins, not to individuals seeking returns from exchanges or platforms in other ways.

The request follows warnings from US banking institutions that some stablecoin offerings could begin to operate like bank deposits, potentially displacing traditional savings accounts in a competitive market niche.

The GENIUS Act won’t happen overnight. It would take effect 18 months after signing, or 120 days after the regulators complete and finalize the detailed rules. If regulators act quickly, the law might be in effect sooner; if rule-making is slow, there will be a delay.

Meanwhile, Congress is considering a broader law that would establish regulations for these digital markets, including guidelines for categorizing and overseeing cryptocurrencies, trading platforms, and digital asset securities. The bill already passed the House earlier this year, but it has not progressed in the Senate. Pauses for long recesses, backroom  negotiations, and other legislative priorities have slowed the effort.

The doors remain open for bipartisan dialogue, according to news reports, but no new proposals are being brought to the table. Those estimates had been more like 2026, according to previous analyses by congressional leaders. Currently, the schedule is precarious due to present delays.

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