Treasury Proposes Rules for GENIUS Act, Clarifying Stablecoin Regulation

The US Treasury Department has released a proposed rulemaking for implementing the GENIUS Act, which sets up a regulatory framework for stablecoins. The act aims to provide clarity on who can issue and sell these digital assets in the United States.

According to the notice of proposed rulemaking, Section 3 of the GENIUS Act discusses the fundamental architecture of the payment stablecoin market in the US. It prescribes who may issue, offer, sell or otherwise make available payment stablecoins. The section has extraterritorial effect if conduct involves the offer or sale of a payment stablecoin to a person located in the United States.

The proposed rule would provide clarity to industry regarding when an issuer needs to obtain a GENIUS license and when a digital asset service provider may not offer or sell foreign-issued payment stablecoins unless the foreign issuer has the technological capability to comply with, and will comply with, the terms of any lawful order and any reciprocal arrangement between the US and the issuer's home jurisdiction.

Treasury Secretary Scott Bessent stated that President Trump and Congress delivered the GENIUS Act, establishing a landmark framework for payment stablecoins. Treasury is moving quickly to implement that framework and welcomes input from stakeholders as it develops the rules governing stablecoins.