New York State Department of Financial Services (NYDFS) has proposed updated stablecoin regulations designed to align with federal GENIUS Act standards ahead of the law's implementation. According to the DFS website, the proposal introduces new reserve concentration caps limiting how much of a stablecoin issuer's reserves can sit at any single custodian, a requirement not present in the original 2022 guidance. Acting Superintendent Kaitlin Asrow announced the proposal on Tuesday, stating that the rules and expectations have protected New Yorkers and facilitated a stable market. The proposal introduces new provisions including mandatory risk management programs covering internal controls, information security, internal audit systems, asset growth, earnings, insider and affiliate transactions, and service provider oversight.
The updated framework introduces stricter reserve and redemption rules that significantly expand oversight requirements for authorized stablecoin issuers. As reported by The Block, the rules require reserve assets to be diversified across custodians with maximum concentration limits for any single custodian. The framework establishes a two-business-day outer limit for timely redemption following a holder's request, with only the OCC, Federal Reserve, or NYDFS superintendent able to impose discretionary limitations. If an issuer falls below its minimum reserve requirement for 15 consecutive business days, it must begin winding down - liquidating reserves and redeeming outstanding coins at no charge to customers. The framework also reinforces federal restrictions that prevent issuers from offering interest-bearing stablecoins and pushes stablecoin issuers closer to prudential oversight.
The proposal introduces a dual-certification layer for reserve reporting, requiring each month that the CEO and CFO of a licensed issuer certify the accuracy of the required reserve composition report. An annual attestation from a registered public accounting firm is also required, covering the effectiveness of internal controls tied to reserve compliance. Issuers with at least $25 billion in outstanding stablecoins face additional requirements, including holding at least 0.5% of reserves, capped at $500 million, in insured deposits at an insured depository institution. The framework explicitly meets the Treasury's "substantially similar" certification threshold, which determines whether a state regulatory regime can retain oversight of stablecoin issuers with less than $10 billion in outstanding issuance value. A 10-day pre-proposal comment window opened June 9, followed by a 60-day formal comment period after publication in the State Register.
The GENIUS Act is moving into a key rulemaking stage as digital dollar users and stablecoin issuers face a June 9, 2026 deadline for comments on FinCEN and OFAC proposals. According to reports from Crypto.news, this represents one of the last opportunities for firms, banks, and users to shape the regulatory framework before regulators finalize it. The July 18, 2026 milestone marks one year after the GENIUS Act became law on July 18, 2025, and serves as another critical deadline for implementing rules under the stablecoin law. The GENIUS Act takes effect on January 18, 2027, with existing New York-licensed issuers receiving a one-year transition period to comply with updated requirements. The final rule takes effect on the same date the GENIUS Act becomes operative, with the 2022 guidance staying in force until then.
Stripe, Visa, Mastercard and Coinbase are planning to form a consortium to issue a new stablecoin, seeking to challenge the dominance of Circle and Tether, which currently hold 80% of market share. According to CoinDesk, Coinbase's participation is notable given its close partnership with Circle, as Coinbase is the biggest distribution partner for Circle's stablecoins and shares a portion of Circle's revenue. Coinbase and its users held about US$19 billion of USDC tokens, accounting for more than 25% of the tokens in circulation as of the end of the first quarter. The new stablecoin will be compliant with the GENIUS Act, with Stripe-owned Bridge offering stablecoin issuance business and winning partners including payroll company Deel and buy-now-pay-later firm Klarna.
