The U.S. Treasury has opened a 60-day public comment period on proposed rules under the GENIUS Act that would define when a payment stablecoin is issued “in the United States” or sold to a “U.S. person,” placing licensing requirements at the center of the next phase of the country’s stablecoin framework.
Under the Treasury’s proposal, payment stablecoin issuers would generally need either federal or state authorization beginning Jan. 18, 2027. The consultation offers issuers, banks, technology firms and market participants a window to challenge or clarify how the rules would apply to cross-border distribution, offshore entities and stablecoins that circulate widely on public blockchains.
The draft places particular weight on jurisdiction. A token may trade globally, but the proposed standards seek to determine when its issuance or sale creates a sufficient U.S. connection to trigger American licensing rules. That approach could make distribution controls, issuer location, marketing practices and user onboarding more consequential for stablecoin operators than they have been in earlier phases of the market.
The proposal arrives as payment stablecoins have become increasingly connected to dollar liquidity, crypto trading and tokenized financial products. Treasury Secretary Scott Bessent has previously framed stablecoin policy as part of preserving the international role of the U.S. dollar, a goal that gives the rules implications beyond consumer protection and domestic oversight.
Licensing questions move closer to implementation
The GENIUS Act framework would require issuers to prepare for a more defined federal-state licensing system rather than relying on the fragmented compliance structures that have governed parts of the sector. The Treasury notice does not settle every operational question, but it begins the process of translating statutory language into tests that regulators and companies can apply.
The date of Jan. 18, 2027 gives regulated firms a prospective compliance target, while the 60-day comment period could expose areas where the proposed definitions are difficult to implement in decentralized or international networks. Stablecoin issuers commonly rely on a mix of direct issuance, exchange distribution, third-party wallets and blockchain transfers that can make the location of a “sale” harder to establish than in conventional payments.
The rules could also shape competition among issuers. Firms able to obtain licenses and build compliant distribution systems would have a clearer route to serving U.S.-linked users. Smaller issuers and foreign operators may face higher legal and technical costs, particularly if they must restrict access or redesign their redemption and onboarding processes.
Quiet bitcoin options market contrasts with token gains
The regulatory development came during a broadly firmer 24-hour period for major crypto assets. Bitcoin rose 2.26%, Ether added 1.58%, Solana gained 1.91% and BNB increased 0.17%, according to the market data supplied. Several smaller tokens posted much larger moves, including TUT, up 39.87%, and ACE, up 14.39%.
Meme-token trading was especially volatile. A BSC-based token called “牛来” briefly exceeded a reported market capitalization of $49 million before retreating to roughly $37.73 million, while retaining a 24-hour gain of 237.4%. Earlier figures placed its value above $46 million and later around $43.80 million, illustrating how quickly thinly traded tokens can move when attention concentrates on a single narrative.
Those sharp isolated gains sit alongside unusually subdued pricing in bitcoin’s options market. Yann Allemann and Jan Happel, co-founders of Glassnode, cited bitcoin implied volatility in the lowest 2% of its historical distribution. Glassnode co-founder Rafael Schultze-Kraft said the firm’s volatility value trap score had reached 91 out of 100, its highest level in more than three and a half years.
Schultze-Kraft also said options-implied volatility was around 1.5 times realized volatility. In practical terms, options markets were pricing a greater chance of future movement than bitcoin’s recent spot-price behavior had delivered. That gap can reflect demand for protection against a market move even while daily price action remains restrained.
Compound approves $52 million budget
Compound’s governance approved a $52 million budget following a leadership reshuffle, according to the protocol’s governance developments. The lending protocol had about $1.2 billion in total value locked, compared with a reported $12 billion peak in 2021.
The budget places Compound among the larger decentralized-finance projects attempting to rebuild activity after the sector’s contraction from its 2021 highs. Its stated plans include work aimed at institutional clients and real-world-asset products, an area where lending protocols hope regulated tokenized assets can create more durable collateral and borrowing demand.
A $52 million budget is substantial relative to Compound’s current locked value, increasing pressure on the protocol’s new leadership to show that spending can translate into product use and sustainable fee generation. Institutional product development can involve longer sales cycles, compliance work and partnerships that differ sharply from the rapid token-incentive strategies that helped drive defi’s earlier growth.
On-chain market structure enters sec debate
Hyperliquid’s policy center and Douro Labs also used a joint submission to the Securities and Exchange Commission to advocate repealing Regulation NMS Rule 611, widely known as the trade-through rule. The groups argued that the SEC should issue clearer best-execution guidance for on-chain trading.
Their letter pointed to transparent and manipulation-resistant price reference data, including oracle networks such as Pyth Network, as potential tools for decentralized markets. The request connects a traditional equities-market rule to blockchain-based execution, where trades may occur across multiple pools, automated market makers and perpetual futures venues rather than centralized exchanges.
Whether regulators accept that comparison remains uncertain. The filing nevertheless shows that crypto firms are moving beyond requests for broad legal clarity and toward detailed arguments over market structure, execution standards and the data used to establish fair prices.
As U.S. reshapes dollar-backed crypto rules, explore why stablecoins matter in Asia in this deep dive.
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