US Treasury Proposes Stablecoin Rules Under GENIUS Act

The US Treasury released proposed regulations on August 17, 2026, that spell out when stablecoin issuers and digital asset platforms fall under the GENIUS Act. The rules open a 60-day public consultation period.

Under the GENIUS Act, from January 18, 2027, businesses will generally be prohibited from issuing payment stablecoins in the US unless they hold an appropriate federal or state licence. The Treasury proposal aims to clarify what counts as issuing a stablecoin “in the United States” and when digital asset service providers are considered to be offering or selling stablecoins to US customers.

A second layer of restrictions takes effect July 18, 2028. After that date, platforms will generally be unable to offer payment stablecoins to US users unless the tokens come from qualifying issuers under the new framework.

The proposed rules define the licensing threshold around actual issuance, not just distribution. An issuer that creates a stablecoin on a US-based blockchain or under US law would need a licence, even if its customers are overseas. Platforms that list stablecoins from unlicensed issuers would face restrictions once the 2028 deadline hits.

The GENIUS Act requires payment stablecoins to be backed by relatively safe, liquid assets, including bank deposits and short-term US Treasury securities. Federal Reserve officials have said the framework could provide greater regulatory certainty while highlighting risks involving reserve quality, financial stability and illicit finance.

The Treasury proposal is one piece of a broader regulatory rollout. The Treasury, FinCEN and other US financial regulators have already proposed rules covering anti-money laundering, sanctions compliance and customer identification requirements for stablecoin issuers. Those rules are also in various stages of public comment.

For stablecoin issuers and exchanges seeking access to the world's largest financial market, the implications are direct. A company that issues a stablecoin today without a US licence would need to either obtain one by January 2027 or stop issuing to US persons. Exchanges that list such tokens would have until July 2028 to phase them out.

The 60-day comment window gives crypto companies, financial institutions and other stakeholders a chance to shape how the rules operate before the GENIUS Act takes effect. Industry groups have already signaled they will push for narrower definitions of “issuance” and “US customer” to limit the scope of the licensing requirement.

The Treasury's approach follows a pattern seen in other jurisdictions where regulators first define the perimeter, then set transition periods. The EU's Markets in Crypto-Assets regulation, for example, gave issuers 18 months to comply after the rules were published. The US timeline is roughly similar.

The biggest unknown for the market is how many current stablecoin issuers will qualify for a US licence. The reserve requirements under the GENIUS Act are stricter than what some offshore issuers maintain. Firms that rely on commercial paper or corporate bonds for backing would need to shift into Treasuries and bank deposits.

The proposed rules do not address enforcement or penalties directly. Those will come in separate rulemakings from the Treasury and the Fed. The licensing requirement itself carries teeth: an unlicensed issuer that continues to sell stablecoins to US residents after January 2027 would be violating federal law.

Mastercard recently tested a single-audit compliance tool for stablecoins with Borderless.xyz, a sign that the infrastructure for meeting regulatory requirements is already being built. The Treasury is also working on a separate rule that would require stablecoin issuers to report reserve composition quarterly. That proposal is expected later this year.