NYDFS Proposes Stablecoin Rules to Align New York With GENIUS Act

The New York Department of Financial Services on June 9 proposed stablecoin regulations to align with the federal GENIUS Act, adding custodian concentration caps and formal risk management requirements while preserving existing 1:1 reserve and audit standards.

NYDFS filed the stablecoin alignment proposal on June 9

The New York Department of Financial Services published a proposed rule on June 9 titled "Authorized Payment Stablecoin Issuers," designed to bring New York's existing state framework into alignment with the federal GENIUS Act. The proposal preserves the core requirements from the department's original June 2022 guidance: one-to-one US dollar backing, redemption at par on demand, defined permissible reserve asset categories, and mandatory independent audits confirming reserve adequacy.

"The GENIUS Act's provisions mirror the NYDFS's stablecoin framework, and this proposal will ensure that the Department's regulatory regime is in full alignment with new federal requirements while maintaining our standard for protecting consumers and fostering responsible innovation." — Kaitlin Asrow, Acting Superintendent, NYDFS

Two new requirements address gaps opened by the GENIUS Act

The proposal adds two requirements that New York's 2022 guidance did not include. First, reserve assets must be diversified across custodians, with maximum concentration limits capping how much any single custodian can hold. Second, licensed issuers must adopt formal risk management programs covering internal controls, information security, internal audit systems, asset growth oversight, earnings management, insider and affiliate transactions, and service provider arrangements. Issuers with more than $25 billion in stablecoins outstanding face an additional floor: at least 0.5% of reserves, capped at $500 million, must be held as insured deposits at a licensed depository institution.

The final rule takes effect when the GENIUS Act does in January 2027

The NYDFS rule is designed to become operative on January 18, 2027 — the same date the GENIUS Act takes effect — with a one-year transition period for existing New York-licensed issuers. The 2022 guidance stays in force until the new regulation applies. 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 allows stablecoin issuers with $10 billion or less in outstanding supply to operate under state regulation, provided the US Treasury certifies the state framework as substantially equivalent to federal standards. New York's proposal is intended to meet that certification threshold.

Federal agencies coordinated on GENIUS Act implementation ahead of this

The OCC published its own GENIUS Act implementation proposal in February 2026, followed by the FDIC in April. The Federal Reserve is also among the agencies represented on the Stablecoin Certification Review Committee that will assess state framework applications. The NYDFS signed a memorandum of understanding with the European Banking Authority on June 2, establishing procedures for coordinated oversight of entities issuing stablecoins across US and EU jurisdictions — a week before announcing Tuesday's domestic proposal.