Treasury Proposes Rules for Stablecoin Issuance Under GENIUS Act

The US Treasury Department has proposed new rules for stablecoin issuance and sales under the GENIUS Act. The proposal, part of a broader implementation of the law, focuses on Section 3, which defines when a payment stablecoin is considered issued in the US and when a platform is considered to offer or sell a stablecoin to someone in the country.

According to the Notice of Proposed Rulemaking, a stablecoin would generally be considered issued in the US if the issuer is located in the country at the time of issuance or if the stablecoin is issued to someone located in the US. Foreign issuers could avoid being treated as issuing in the US if they reasonably believe recipients are outside the country and maintain controls designed to prevent issuance to people located in the US.

The GENIUS Act, signed into law in July 2025, requires payment stablecoins to maintain reserves backing their outstanding tokens on a one-to-one basis using eligible assets. The proposed rules would prohibit companies from issuing payment stablecoins in the US without authorization under the federal or state regulatory framework, subject to exceptions for qualifying foreign issuers.

Beginning July 18, 2028, digital asset service providers would be prohibited from offering or selling stablecoins to people located in the US unless they were issued by a permitted payment stablecoin issuer or a qualifying foreign issuer. The proposal also seeks industry feedback on how the framework should apply to activities including airdrops, wrapped tokens, and blockchain bridges.

Treasury is accepting comments for 60 days after the proposal's publication in the Federal Register on August 18. The GENIUS Act is expected to take effect on January 18, 2027.