The U.S. Treasury Department has issued a new notice of proposed rulemaking to implement Section 3 of the GENIUS Act. It is moving closer to defining which companies can issue payment stablecoins in the United States. It will also define when digital asset platforms can offer those tokens to U.S. customers.
Treasury published the proposal on August 17, 2026, and opened a 60-day public-comment period following publication in the Federal Register. The proposal focuses on jurisdiction and market access rather than creating a new reserve framework.
Treasury Secretary Scott Bessent said the administration is seeking to provide regulatory certainty for businesses while supporting the role of the U.S. dollar in global finance.
What the New GENIUS Act Stablecoin Rules Would Define
The latest GENIUS Act stablecoin rules target a central question: when is a person legally issuing a payment stablecoin in the United States?
Treasury said the proposed regulation would establish a framework for determining when an issuer must obtain an appropriate federal or state license. Under the GENIUS Act, the law’s expected effective date is January 18, 2027. However, the alternative statutory trigger based on the timing of final regulations could make the law effective earlier.
Beginning on the effective date, a person generally may not issue a payment stablecoin in the United States without qualifying as a permitted payment stablecoin issuer.
The proposal also addresses the other side of the market: digital asset service providers. Treasury wants to define when an exchange, platform or other service provider is considered to be offering or selling a payment stablecoin to someone in the United States.
Accounting Today reported that the proposal implements Section 3, which establishes the basic legal architecture for who may issue, offer, sell or otherwise make payment stablecoins available in the U.S. market.
The distinction matters because the law does not simply regulate companies based on where their headquarters are located. It also contains provisions addressing activity involving U.S. customers and gives Section 3 extraterritorial effect in certain circumstances.
Foreign Stablecoin Issuers Face Additional Conditions
Foreign-issued stablecoins are another major part of the proposal.
Under the GENIUS Act, digital asset service providers generally may not offer, sell or otherwise make available a payment stablecoin issued by a foreign payment stablecoin issuer. This applies unless the issuer has the technological capability to comply with, and will comply with, lawful U.S. orders and applicable reciprocal arrangements with its home jurisdiction.
Treasury’s announcement says its proposed framework is intended to clarify how these requirements would operate in practice.
That could have implications for major offshore stablecoin issuers. However, the proposal itself does not amount to an immediate ban on any particular token.
CoinDesk noted that foreign issuers, including Tether, are likely to receive close attention as Treasury develops the final framework. The publication also reported that the proposal contains numerous questions that Treasury wants stakeholders to address before finalizing the rules.
The distinction between an issuer’s location, a platform’s location and a customer’s location could therefore become an important compliance issue for global stablecoin businesses.
The Rules Do Not Create a New Reserve Requirement
The latest Treasury proposal should not be confused with the broader prudential rules being developed by U.S. banking regulators.
The GENIUS Act itself establishes reserve, redemption, disclosure, capital, liquidity and risk-management requirements for permitted payment stablecoin issuers. Those requirements are being addressed through multiple regulatory proceedings. These involve agencies including the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve and National Credit Union Administration.
Treasury’s August 17 proposal instead centers on Section 3: issuance in the United States and the offering or sale of payment stablecoins to people in the United States.
That makes the proposal different from Treasury’s earlier April rulemaking on state-level regulatory regimes. It is also different from its April joint FinCEN-OFAC proposal covering anti-money-laundering and sanctions compliance.
The separation of responsibilities is important because the GENIUS Act requires several regulators to establish implementing rules. This is instead of placing the entire stablecoin framework under one agency.
Why the Proposal Matters for Exchanges and Issuers
The proposed rules could give stablecoin companies and trading platforms a clearer framework for determining whether their activities fall inside U.S. licensing requirements.
For issuers, the key issue is whether their activities constitute issuing a payment stablecoin in the United States. For digital asset service providers, the question becomes whether their conduct amounts to offering or selling the asset to a person in the United States.
The latter requirement becomes especially important from July 18, 2028. Starting on that date, the GENIUS Act generally prohibits digital asset service providers from offering or selling payment stablecoins to people in the United States unless the stablecoins were issued by permitted issuers.
The law therefore creates two different compliance milestones. The licensing restrictions on issuance begin when the Act becomes effective. Meanwhile, the broader restriction on offering and selling unlicensed payment stablecoins to U.S. persons arrives later.
The framework could also affect how offshore businesses structure U.S. access. The ultimate impact will depend on Treasury’s final definitions. It will also depend on how regulators interpret the relationship between issuers, exchanges, intermediaries and customers.
Treasury Missed the One-Year Rulemaking Deadline
The latest proposal arrives after the statutory one-year rulemaking deadline.
The GENIUS Act was signed into law on July 18, 2025. Section 13 directs the relevant federal and state regulators, including Treasury, to promulgate implementing regulations through notice-and-comment rulemaking no later than one year after enactment.
That deadline expired on July 18, 2026, without all of the implementing rules being finalized.
The Block reported in July that Treasury and the four primary federal payment stablecoin regulators had reached the deadline without a final set of implementing regulations. Several proposed rules were still moving through the public-comment process at that time.
The delay does not automatically eliminate the January 2027 effective date. The statute contains its own effective-date mechanism. Under that mechanism, the Act becomes effective on the earlier of 18 months after enactment or 120 days after the relevant final regulations are issued.
That leaves regulators and industry participants with a relatively compressed period to digest final rules and prepare for implementation.
What Happens Next
Treasury will accept public comments for 60 days after publication of the NPRM in the Federal Register. The comments will be publicly available through Regulations.gov.
The department is expected to review feedback before issuing a final rule. Treasury’s proposal builds on its September 2025 advance notice of proposed rulemaking. That notice sought industry input on a broad range of GENIUS Act implementation questions.
For the market, the areas to monitor include Treasury’s final definitions of U.S. issuance and U.S.-based offering or sale. Other areas include treatment of foreign issuers, compliance expectations for digital asset service providers and coordination with the other agencies implementing the GENIUS Act.
The immediate development is therefore not a final licensing rule or a directive to remove specific stablecoins from U.S. platforms. It is a proposed interpretation of the law that could determine how stablecoin businesses operate in the American market once the GENIUS Act takes effect.
