On August 17, 2026, the U.S. Department of the Treasury published a Notice of Proposed Rulemaking (“Proposed Rule”) to implement Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins (“GENIUS”) Act, enacted on July 18, 2025 (the “Act”). The proposed rule would establish the regulatory framework governing the issuance, offer, sale, and making available of payment stablecoins in the United States.
The Proposed Rule’s core prohibition comes directly out of the statute – it is unlawful for any person to issue a payment stablecoin in the United States unless such person is a permitted payment stablecoin issuer or a foreign payment stablecoin issuer that meets the criteria set out in Section 18(a) of the Genius Act.
Beginning July 18, 2028, it will also be unlawful for digital asset service providers to offer or sell a payment stablecoin to a person located in the United States unless it was issued by an authorized issuer. The rule is intended to have extraterritorial effect where conduct involves the offer or sale of a payment stablecoin to a U.S.-located person.
The Proposed Rule defines key terms, including:
- “Digital asset service provider” includes any person that, for compensation or profit, engages in the business in the United States of issuing payment stablecoins. Treasury determined that issuers and digital asset service providers are not mutually exclusive categories
- “issue” means the first transfer of a payment stablecoin by the issuer that results in a third party having the right to use, transfer, or redeem the stablecoin
- “issuer” means the person obligated to redeem the stablecoin for a fixed amount of monetary value
- “located in the United States” means the physical presence for individuals, or organization/principal place of business for entities
The Proposed Rule clarifies that payment stablecoin issuers may simultaneously be digital asset service providers, meaning both sets of restrictions can apply to the same person.
Treasury also proposes certain safe harbors for foreign issuers and digital asset service providers who (i) reasonably believe their counterparties are not U.S.-located, (ii) maintain policies and controls to prevent U.S.-directed activity, and (iii) refrain from U.S.-targeted advertising. The Proposed Rule also includes examples of knowing participation in unlawful issuance, which may result in fines up to $1 million per violation or imprisonment up to five years. Certain transactions—including peer-to-peer transfers, same-parent-company cross-border account movements, and self-custody wallet transactions—are exempt.
Treasury requests public comments (which will be due 60 days after publication in the Federal Register) on a number of aspects of the proposal, including the definition of “located in the United States,” the appropriate territorial framework, due diligence standards, and whether additional safe harbors should be adopted, among other requests.