Treasury Unveils Tighter Stablecoin Rules Under GENIUS Act

The U.S. Department of the Treasury has proposed new regulations for stablecoins under the GENIUS Act, which aims to establish a comprehensive federal framework for regulating payment stablecoins.

The proposal, published in the Federal Register on August 18, 2026, focuses on who is legally permitted to issue, offer, sell, or make available payment stablecoins in the United States.

A 'permitted payment stablecoin issuer' must be a U.S.-formed entity that qualifies as one of three types: a subsidiary of an insured depository institution approved under the Act, a federally qualified payment stablecoin issuer, or a state-qualified payment stablecoin issuer.

The proposed regulations also clarify that entities or individuals who knowingly participate in a violation of the issuance prohibition face significant penalties, including fines of up to $1 million per violation and imprisonment of up to five years.