Treasury Proposes First GENIUS Act Stablecoin Rule, Opening 60-Day Comment Window

The U.S. Treasury Department has published its first major proposal to implement the GENIUS Act, the federal stablecoin law signed last July. A 60-day public-comment period is now open on rules that would define who can legally issue payment stablecoins in the United States. (CoinDesk)

The notice of proposed rulemaking went up Monday on regulations.gov. It targets Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act. Under the law, entities generally cannot issue payment stablecoins in the U.S. without an appropriate federal or state license. The proposal asks when a stablecoin is considered “issued” in the U.S. and when an issuer or service provider is deemed to be offering or selling a payment stablecoin to a U.S. person. (The Block)

Treasury Secretary Scott Bessent said the administration is moving quickly to implement the framework. “@POTUS and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework,” Bessent wrote on X, adding that Treasury “welcomes input from stakeholders as we work to provide the regulatory certainty businesses need to innovate and grow in America, cement the role of the U.S. dollar as the world’s reserve currency, and keep America the crypto capital of the world.”

The practical upshot: these definitions will determine which tokens count as payment stablecoins subject to federal oversight. They will also decide which offshore issuers can still reach U.S. users.

Foreign issuers and the Tether question

The proposal tackles foreign-issued stablecoins head-on. Digital asset service providers would face restrictions on offering or selling foreign-issued payment stablecoins unless the foreign issuer can comply with U.S. legal orders and applicable reciprocal arrangements. (The Block)

Industry will be watching how the final rule treats offshore issuers. CoinDesk has named Tether as a focal point. The proposal draws on securities laws’ “longstanding legal regimes that address the issue, offer, and sale of other financial instruments, such as securities, including offshore activities” as a reference point.

Treasury’s proposed text signals where it lands on the commercial question. “Treasury believes that the Act evinces a clear intent for payment stablecoins to serve as an effective means of payment and settlement, including across borders, and application of traditional investment rules to payment stablecoins may frustrate that goal,” the proposal states.

The read is straightforward. Treasury is leaning toward treating payment stablecoins as payments infrastructure rather than securities. Still, the proposal poses dozens of questions that must be answered before a final rule.

A second deadline, and a slipping timeline

The comment period runs for 60 days after publication in the Federal Register, with a deadline in mid-October. The proposal builds on an advance notice of proposed rulemaking that Treasury issued in September 2025. (CoinDesk)

The GENIUS Act set a one-year target for finalized rules. That deadline passed last month without the administration meeting it. The law’s next hard date is its effective date: January 18, 2027. Beginning July 18, 2028, digital asset service providers generally will not be permitted to offer or sell payment stablecoins to U.S. persons unless the tokens are issued by a licensed issuer. (The Block)

All rules finalized by January? Unlikely. New regulations usually come with transition runways. Treasury is among several government entities and agencies, including banking and markets regulators, that must put rules in place before the stablecoin law reaches full effect. (CoinDesk)

GENIUS Act implementation also runs alongside Congress’s push to pass the Digital Asset Market Clarity Act. That bill would rewrite portions of GENIUS, notably its treatment of rewards programs for stablecoin customers on exchanges. The Clarity Act failed to begin key votes earlier this month before the Senate’s August recess.

“Crypto market structure legislation remains essential to establishing a digital asset regulatory framework in the United States,” Bessent said in a separate statement posted Monday. (Cointelegraph)

The reference to market-structure legislation, separate from the stablecoin rule itself, signals that Treasury sees the two tracks as linked.