Treasury Issues Proposed Rulemaking for Payment Stablecoin Issuance Under GENIUS Act

The US Treasury has published proposed rulemaking for Section 3 of the GENIUS Act, which deals with payment stablecoin issuance and sale. This is part of a broader effort to regulate the crypto market under the act.

The rules clarify the jurisdictional trigger, stating that a covered payment stablecoin is one issued in the US or issued to a person located in the US. A US resident on holiday abroad at the time of issuance would not be covered, nor would a non-US resident temporarily in the States. However, an airdrop to a US resident who is physically present would be considered covered.

The draft rules also outline timelines for compliance. The requirement to use only regulated payment stablecoins will commence on January 18, 2027, as will the rule governing which permitted foreign stablecoins can be issued or sold. Crypto exchanges have an additional 18 months before it becomes unlawful for them to offer or sell a non-permitted payment stablecoin to a US person. However, this later timeline applies specifically to foreign-issued stablecoins.