The U.S. Treasury Department has begun the formal process of writing rules for the GENIUS Act, a stablecoin law that would require most issuers of payment stablecoins used in the United States to operate under federal or state authorization. Treasury’s notice of proposed rulemaking opens a 60-day public comment period after publication in the Federal Register, giving issuers, digital asset platforms, banks, payment firms and other market participants a chance to weigh in before the rules are finalized.
The proposal focuses on section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, which is scheduled to take effect on Jan. 18, 2027. The law would limit the issuance of payment stablecoins in the United States to entities holding an appropriate federal or state license, placing stablecoin issuance closer to the regulated framework used for other financial products and payment services.
Treasury is also seeking to define the boundaries of U.S. activity in a market where tokens can be issued in one jurisdiction and traded globally within seconds. Its proposed rules address when a payment stablecoin is considered to be “issued” in the United States, as well as when an issuer or digital asset service provider is deemed to be offering or selling a payment stablecoin to a U.S. person.
Rules target issuance and access to foreign stablecoins
The GENIUS Act’s restrictions extend beyond U.S.-based issuers. Digital asset service providers would face limits on offering or selling foreign-issued payment stablecoins to U.S. users unless the foreign issuer can comply with U.S. legal orders and meets any applicable reciprocal-arrangement requirements.
That approach could place foreign stablecoin issuers under pressure to establish clearer legal and operational links to the U.S. market if they want their tokens to remain broadly available to American customers. Treasury’s definitions will be particularly consequential for companies whose platforms, wallets, liquidity providers and customers operate across several countries.
The proposal does not create an immediate ban on foreign stablecoins or require holders to sell tokens during the public-comment period. The rulemaking is an early stage in the regulatory process, and Treasury will review submissions before issuing final rules. The law’s main effective date is Jan. 18, 2027, while a separate compliance deadline for intermediary distribution falls later.
Beginning July 18, 2028, digital asset service providers generally will be barred from offering or selling payment stablecoins to people in the United States unless those tokens are issued by a licensed issuer. The later deadline gives platforms and other intermediaries additional time to adapt their listing, custody, wallet and customer-access policies.
Treasury seeks answers left open by the statute
The language around “issuance,” “offering” and “selling” will determine how far the framework reaches in practice. A stablecoin may trade on decentralized networks and be transferred peer-to-peer without a central operator handling every transaction. Yet many users access those tokens through centralized platforms, custodians, payment applications or other service providers that may fall within the law’s reach.
Treasury’s eventual interpretation could therefore affect more than issuers. It could shape how platforms assess which stablecoins may be made available to U.S. customers, how wallet providers handle token access, and how overseas firms structure U.S.-facing operations.
The department’s current consultation follows an advance notice of proposed rulemaking issued last September. That earlier notice remains part of the rulemaking record, Treasury said, meaning comments and issues raised during the initial consultation can inform the agency’s final approach alongside new submissions.
Public comments are likely to focus on whether Treasury’s definitions are sufficiently clear for businesses to apply consistently. Market participants may also seek guidance on how the rules would apply to secondary-market trading, decentralized protocols, token redemptions, offshore entities with U.S. customers, and technical service providers that do not themselves issue stablecoins.
A new federal framework after years of fragmented oversight
President Donald Trump signed the GENIUS Act in July 2025, creating a federal legal framework specifically focused on payment stablecoins. Before the law, U.S. oversight of stablecoin activity was spread across state money-transmission rules, banking regulation, securities and commodities laws, consumer-protection standards, and sanctions obligations.
The new law would establish a more direct licensing structure for payment stablecoin issuers while creating federal standards around which tokens can be distributed through U.S.-facing intermediaries. That structure could reduce uncertainty for firms prepared to meet the requirements, while making access more difficult for issuers that cannot satisfy U.S. compliance expectations.
The proposal also reflects Treasury’s effort to prevent regulatory gaps created by offshore issuance. Stablecoins are frequently marketed as global products, but the GENIUS Act ties access to U.S. users to an issuer’s ability to respond to U.S. legal orders and operate within reciprocal regulatory arrangements where required.
Treasury’s final rules will determine whether those requirements can be implemented without creating unclear obligations for firms operating across borders. For now, the comment period offers the industry a limited window to challenge definitions, identify operational problems and argue for workable compliance standards before the Jan. 18, 2027 effective date begins to reshape the U.S. payment-stablecoin market.
For deeper context on licensing and policy shifts, read why the GENIUS Act could be the turning point for stablecoins today.
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