The U.S. Department of the Treasury has published a draft regulation containing key rules for enforcing the $GENIUS Act, which governs the stablecoin market. The proposed framework aims to clarify the conditions under which companies wishing to issue stablecoins in the U.S. must obtain federal or state licenses, as well as the conditions under which stablecoins issued abroad may be offered to American users.
The Notice of Proposed Rulemaking (NPRM), published by the Treasury Department, details the provisions for implementing Section 3 of the $GENIUS Act and will organize the collection of public comments on this provision for 60 days.
According to the draft regulation, beginning January 18, 2027, the anticipated effective date of the $GENIUS Act, individuals or legal entities without the appropriate federal or state license will generally not be able to issue stablecoins for payment purposes in the United States.
The Treasury Department seeks to more clearly define the scope of the term "issuing payment stablecoins in the U.S." within the regulation. This aims to reduce industry uncertainty regarding when stablecoin companies need to obtain licenses under the $GENIUS Act.
The regulation also establishes conditions for stablecoins issued by companies outside the U.S. Accordingly, digital asset service providers may offer stablecoins in the U.S. market provided that the foreign stablecoin issuer is technically capable of complying with lawful orders from U.S. authorities and adheres to mutual rules between the U.S. and the issuer's country.
The second key date under the $GENIUS Act is July 18, 2028.
From this date, digital asset service providers will be permitted to offer or sell to users in the U.S. only payment stablecoins issued by licensed issuers.
The proposed Treasury regulation also aims to clarify the obligations of cryptocurrency exchanges, custodians, and other digital asset service providers by defining the term "offering or selling" a stablecoin to a person located in the United States.
U.S. Treasury Secretary Scott Bessent stated that the $GENIUS Act creates a comprehensive legal framework for payment stablecoins, and that the Treasury Department intends to swiftly implement the relevant rules. Bessent noted that regulatory clarity is intended to encourage companies to innovate in the U.S., as well as strengthen the dollar's position as the global reserve currency.
The new draft regulation follows preliminary regulatory work published by the Treasury Department last September regarding implementation of the $GENIUS Act, for which it solicited feedback from industry representatives. The Department expects stablecoin companies, financial institutions, and other stakeholders to submit their views on the new proposal during the 60-day consultation period.
*This is not investment advice.
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