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GENIUS stablecoin licensing
The U.S. Treasury Department proposed rules to implement Section 3 of the Guiding and Establishing National Innovation for US Stablecoins Act, generally barring companies from issuing payment stablecoins in the United States without a federal or state license beginning Jan. 18, 2027.
“proposing rules that would generally bar companies from issuing payment stablecoins in the United States without a federal or state license beginning Jan. 18, 2027”
Treasury said the proposal is intended to define when a stablecoin is considered “issued” in the United States and when it is being offered or sold to a U.S. customer, including treating issuance as the first transfer by an issuer that gives another person the right to use, transfer or redeem the token.
Treasury also proposed that digital asset service providers generally would be prohibited from offering or selling payment stablecoins to U.S. customers beginning July 18, 2028 unless the coins were issued by a permitted issuer.
The proposal further addresses foreign issuers, allowing U.S. distribution only under specified conditions, including an issuer’s ability to comply with lawful orders and applicable reciprocal arrangements.
Treasury Secretary Scott Bessent said the department is seeking stakeholder input as it works to provide regulatory certainty for companies operating in the market.
What counts as “offering”
Treasury’s Section 3 framework would make it unlawful for anybody other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States, with fines of up to $1 million and up to five years in prison for violations.
The proposal also defines when a platform is considered to offer or sell a stablecoin to someone in the country, including examples such as directly soliciting U.S. users, advertising that a stablecoin is available to them, responding to purchase inquiries from people in the country, and helping users bypass location restrictions such as IP address checks.
Treasury said it is treating stablecoin issuance as a jurisdictional question tied to where recipients are located, with the proposal stating that Section 3 is intended to reach conduct outside the United States when it involves offering or selling a stablecoin to someone located in the country.
In a statement, Scott Bessent said, "President Trump and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework," while Treasury also said it would accept comments for 60 days after publication in the Federal Register.
The Block described the same NPRM as seeking public comments on the GENIUS Act, with the GENIUS Act expected to take effect on Jan. 18, 2027 and Treasury seeking clarity on when a stablecoin is considered to be "issued" in the U.S.
Foreign issuers and next steps
Treasury’s proposal would require foreign issuers to have the technological capability to comply with, and will comply with, the terms of any lawful order and any reciprocal arrangement between the United States and the issuer’s home jurisdiction.
“scheduled for publication in the Federal Register Tuesday, Aug. 18”
AMBCrypto said exchanges would be required to check whether the stablecoins they want to list are from authorized issuers, and it described a major requirement that foreign issuers respond to U.S. legal orders in ways that could include freezing, seizing or burning stablecoins or stopping them from moving when legally required.
The proposal also said simply listing a stablecoin would not automatically make an exchange its issuer, but exchanges and market makers could face problems if they help newly created, unauthorized stablecoins reach buyers.
Treasury is scheduled to publish the proposal in the Federal Register on Tuesday, Aug. 18, and comments will be accepted for 60 days after publication, with the NPRM inviting the public to offer comments that may be useful for Treasury to consider.
CoinDesk said the definitions are among the most significant remaining pieces of the government’s effort to operationalize the GENIUS Act, particularly for foreign issuers and companies trying to determine when U.S. rules attach to their activities.
