What New York's new stablecoin rule requires of issuers

New York's Department of Financial Services proposed a rewrite of its stablecoin rules on June 9, 2026, aiming to bring the state's oversight of dollar-pegged tokens in line with the federal GENIUS Act. The plan, a new regulation designated 23 NYCRR Part 202, updates guidance the department first issued in June 2022, itself built on a framework for regulating stablecoin issuance that DFS says dates to 2018.

The proposal keeps New York's existing reserve, redemption and audit rules largely intact. It adds a cap on how much of an issuer's reserves can sit with a single custodian and new risk-management paperwork, while the state still waits on Washington to decide whether any of it will count under the new federal law.

What DFS Actually Proposed

The rule would apply to New York's limited purpose trust companies, entities applying for that charter, and other entities the superintendent approves to issue payment stablecoins. It carries forward requirements already in DFS's 2022 guidance: reserve assets backing tokens one-for-one, redemption rights for holders, permissible categories of reserve assets, and independent audits.

Acting Superintendent Kaitlin Asrow said the state's existing rules "have protected New Yorkers and facilitated a stable market," and described the update as bringing DFS "in full alignment with new federal requirements while maintaining our standard for protecting consumers and fostering responsible innovation."

The New Requirements

Beyond what already exists, the proposal would cap the reserve assets an issuer can hold at any single custodian, limiting exposure if one custodian fails. Issuers would also have to adopt formal risk-management programs covering internal controls, cybersecurity, internal audits, asset growth, earnings, transactions with insiders and affiliates, and arrangements with outside service providers.

The rule also calls for monthly public reports on reserve composition, certified by an issuer's chief executive and chief financial officer, reserves held only at eligible financial institutions, specified redemption timing, and ongoing anti-money-laundering and sanctions compliance. It sets out examination, recordkeeping, enforcement, insolvency and custody provisions DFS can use if an issuer runs into trouble.

The Federal Law Behind The Rewrite

President Trump signed the GENIUS Act into law on July 18, 2025, the first major federal statute regulating cryptocurrency. It requires payment stablecoins — tokens redeemable for a fixed amount, typically one dollar — to be backed one-for-one by U.S. dollars or other low-risk assets, and bars issuers from paying interest to holders or claiming their tokens carry federal deposit insurance or legal-tender status.

Issuers can seek approval two ways. Nonbanks, uninsured national banks and foreign bank branches apply to the Office of the Comptroller of the Currency. Nonbank issuers with under $10 billion in stablecoins outstanding can instead operate under a state regulator's oversight — the path New York's proposal is built for.

Why Approval Isn't Guaranteed

A state's rules only count under the GENIUS Act if a federal panel says so. The Stablecoin Certification Review Committee, chaired by the Treasury secretary and including the Federal Reserve chair and the FDIC chair, must determine that a state's framework meets or exceeds federal standards, according to an analysis by the law firm Alston & Bird.

Treasury proposed the principles it will use to make that call in an April 3, 2026 rulemaking, with public comments due June 2, 2026. Alston & Bird's analysis splits the criteria in two: reserve reporting, anti-money-laundering compliance and the ban on interest payments must match federal rules exactly, while redemption timelines, capital and risk-management standards leave states some discretion. The firm's analysis also notes that Florida and Georgia have already enacted frameworks designed to meet the GENIUS Act's substantial similarity standard.

Who's Already Operating Under New York's Rules

New York offers two paths into virtual currency business. The BitLicense, in effect since June 2015, does not carry fiduciary powers and requires a separate money-transmitter license. A limited purpose trust company charter, granted under state banking law, allows fiduciary custody and money transmission without that second license.

The department's website currently lists six stablecoins authorized under its framework: Gemini Dollar, GMO's GYEN and ZUSD, Ripple USD, WisdomTree Dollar and WisdomTree Gold. Paxos Trust Company and Gemini Trust Company were both chartered in 2015; Circle, which received the state's first BitLicense that year, later obtained a trust charter as well.

What Happens Next

DFS opened a 10-day pre-proposal comment period beginning June 9, 2026, to be followed by a formal 60-day comment period once the regulation is published in the New York State Register. If adopted, it would take effect alongside the GENIUS Act itself — the earlier of 18 months after the federal law's enactment, putting the date around January 18, 2027, or 120 days after federal regulators finalize their own implementing rules.

Issuers already licensed by DFS would not have to reapply but would get one year from the rule's effective date to come into compliance, aside from the federal certification question, which remains outside New York's control. DFS has already shown it will act against license holders that fall short: in August 2025, it fined Paxos Trust Company $48.5 million, split between a $26.5 million penalty and a $22 million compliance commitment, over inadequate due diligence of a former partner, Binance Holdings Limited, and deficient anti-money-laundering controls. New York has also moved to coordinate with regulators abroad, signing a memorandum of understanding with the European Banking Authority on June 2, 2026 to share supervisory information on stablecoin issuers.