On June 9, NYDFS announced a proposed regulation to update New York’s U.S. dollar-backed stablecoin framework to conform to federal requirements for state frameworks under the GENIUS Act, which was enacted in July 2025 (covered by InfoBytes here). The proposal would add 23 NYCRR Part 202 for authorized payment stablecoin issuers and would take effect once the GENIUS Act becomes effective. NYDFS stated that the proposal would carry forward existing requirements for stablecoins issued under NYDFS oversight, including requirements governing redemption rights, reserve assets and independent audit reviews, while adding new requirements. The proposed rule would allow limited purpose trust companies, applicants for limited purpose trust company charters and other superintendent-approved eligible entities to apply to issue payment stablecoins. Applicants would also need to demonstrate financial resources and qualified leadership.

Existing issuers approved before the rule’s effective date would not need additional approval to issue their approved stablecoins, but would have to comply with the rule within 12 months, except for the certification requirement. The proposed regulation would require authorized issuers to maintain reserves with eligible financial institutions and to publish monthly reports on the composition of their reserve assets, with each issuer’s CEO and CFO certifying the accuracy of those reports. The proposal also would set requirements addressing: (i) redemption policies and redemption timing; (ii) capital and operational backstops; (iii) prohibited activities and BSA/AML, sanctions, and consumer protection compliance; (iv) governance, internal controls, internal audit systems, and risk management; (v) cybersecurity and customer-notice obligations; (vi) examinations, records, reporting and enforcement; and (vii) insolvency and custody requirements.

NYDFS stated that the proposal is subject to a 10-day preproposal comment period followed by a 60-day comment period upon publication in the State Register. Existing New York-licensed issuers would have a one-year transition period after the final regulation takes effect.