The Treasury proposed definitions for stablecoin issuers under the GENIUS Act, with a 60-day comment period. The law's effective date faces delays as Congress debates changes.
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The U.S. Treasury Department proposed federal definitions Monday for what it means to issue a stablecoin and who must follow the rules under the GENIUS Act. The move is a step toward implementing the new stablecoin law, though deadlines are slipping.
Treasury Secretary Scott Bessent said the administration is moving quickly to provide “the regulatory certainty businesses need to innovate and grow in America,” according to a statement. He cited the role of the U.S. dollar as the world’s reserve currency and keeping America the “crypto capital of the world.”
The proposal treats stablecoins as a new arena. It studied established securities laws as a reference point, citing their “longstanding legal regimes” that address the issue and sale of other financial instruments, including securities. The Treasury said the GENIUS Act intends for payment stablecoins to serve as an effective means of payment and settlement, including across borders. It said applying traditional investment rules to stablecoins may frustrate that goal.
The public and stablecoin issuers have 60 days to submit comments. The department will then review them before issuing a final rule. The proposal poses dozens of questions about how to interpret the law. The industry will pay special attention to how it treats foreign issuers such as Tether, the largest stablecoin issuer. The deadline for responses is mid-October.
Stablecoin issuers and platforms are already testing compliance frameworks. Mastercard recently tested a single-audit stablecoin compliance system with Borderless.xyz.
The law’s one-year target for implementation passed last month without the administration meeting it. The next mark is the effective date of the law, set for January 18. It is unlikely that all rules will be finalized by then. New regulations usually come with a transition period for the industry.
The process of implementing GENIUS exists alongside a separate effort in Congress. The Digital Asset Market Clarity Act would rewrite portions of GENIUS, most notably its treatment of rewards programs for stablecoin customers on exchanges. That bill failed to begin key votes earlier this month. The Senate then left for its August recess. Its future is uncertain.
The Treasury’s proposal is a follow-up to an advance notice it issued in September last year. That notice was meant to start a tight timeline. The comment period closes in mid-October.
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