Licensing starts Jan. 18, 2027. A separate ban on unlicensed stablecoins follows July 18, 2028. Section 3 comments close 60 days after publication.
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New rules from the Treasury Department on Aug. 17 define when payment stablecoins are issued or sold in the United States. The rulemaking is the latest step in implementing the GENIUS Act, whose licensing restrictions take effect in January 2027.
The Notice of Proposed Rulemaking targets Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act. Treasury wants to set the boundaries for what counts as issuing a payment stablecoin "in the United States," the distinction that determines whether an issuer must hold a federal or state license. The department also proposes defining when a digital asset company has offered or sold a stablecoin to a person in the country, a line the agency said would give companies more certainty over when U.S. licensing and distribution restrictions apply.
The expected effective date of the GENIUS Act is Jan. 18, 2027. From that date, companies generally may not issue payment stablecoins in the United States without an appropriate federal or state license, Treasury said. How the agency defines domestic issuance decides which companies must obtain authorization before their tokens reach U.S. customers.
Treasury Secretary Scott Bessent said the department was implementing the GENIUS Act, the law President Donald Trump signed, while seeking feedback from companies and other stakeholders. The rules, he said, were meant to give businesses "regulatory certainty" and support U.S. innovation. Bessent also said the proposal would protect the dollar's role as the global reserve currency.
The licensing requirement sits inside the broader set of obligations the GENIUS Act created when it became law on July 18, 2025, including separate paths for federally supervised issuers and qualifying state-regulated issuers. Reserve, redemption, compliance and disclosure requirements apply to both.
The Office of the Comptroller of the Currency laid out its proposed rules in February. Its plan covers reserves, capital, liquidity and custody for issuers under its authority, plus application and wind-down procedures.
State oversight follows a separate process. Treasury in April proposed a test for whether state systems are comparable to the federal rules. Issuers with less than $10 billion in circulation could remain under qualifying state supervision if their home state passes it.
Foreign-issued stablecoins fall within the latest proposal. Under the GENIUS Act, digital asset service providers generally cannot make a foreign-issued payment stablecoin available to people in the United States, Treasury said, unless the issuer can comply with lawful orders and meet requirements tied to reciprocal arrangements between the United States and the issuer's home jurisdiction. The law gives Treasury a role in deciding whether foreign stablecoin oversight is on par with U.S. requirements. Foreign issuers that qualify can gain access to the U.S. market if they satisfy conditions imposed by the law.
From July 18, 2028, digital asset service providers generally will not be permitted to offer or sell payment stablecoins to people in the United States unless the tokens were issued by a licensed issuer, Treasury said. The proposed definitions of "offer or sell" and of a person "in the United States" therefore affect exchanges and other digital asset businesses serving American customers.
Treasury first sought industry views on these jurisdictional questions through an Advance Notice of Proposed Rulemaking in September 2025. The Aug. 17 notice moves that consultation forward, laying out how Treasury plans to apply the Section 3 restrictions.
Separate rulemaking covers the compliance side. Treasury proposed anti-money laundering rules earlier this year that would place permitted payment stablecoin issuers under the Bank Secrecy Act. The proposal requires systems that can identify suspicious activity and take required action on transactions, including blocking or freezing them when applicable. Companies must also name a U.S.-based person responsible for their compliance programs.
Compliance tools are developing in parallel. Mastercard has been testing a single-audit stablecoin compliance product with Borderless.xyz, where one review is designed to cover multiple regulatory requirements.
Federal regulators have separately proposed customer identification requirements. Bank regulators have been developing standards for reserves, capital, redemptions and custody.
The rulemaking has run past the calendar Congress set. Federal regulators missed the July 18, 2026 deadline for completing key GENIUS Act rules, with several packages still in proposed form. The OCC's main rulemaking remained unfinished. FDIC rules covering issuers linked to the banks it supervises were still moving through the process, and the anti-money laundering and sanctions packages had not been completed.
Missing the one-year rulemaking deadline did not automatically delay the law's expected Jan. 18, 2027 effective date. Prospective issuers have continued preparing for licensing, reserve management, redemption and customer verification while regulators finish the remaining rules.
For the Section 3 proposal, Treasury is asking issuers and digital asset service providers to submit feedback on how the restrictions should operate in practice. Treasury said the comments would be considered before the regulations are finalized. Comments are due within 60 days of the notice's publication in the Federal Register and will be made available through the federal rulemaking system.
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