The U.S. stablecoin framework is moving from legislation into the details that will determine who needs a license and which foreign-issued tokens can reach American users. The Treasury Department said on August 17 that it has issued a notice of proposed rulemaking to implement Section 3 of the GENIUS Act and opened the proposal to public comment.
The proposal is separate from the market-structure debate surrounding the stalled CLARITY Act. Its focus is narrower: defining when a person issues a payment stablecoin in the United States and when a token is offered or sold to a person in the country.
Licensing Boundaries Move Into Focus
Treasury said the GENIUS Act is expected to take effect on January 18, 2027. From that point, a person generally may not issue a payment stablecoin in the United States without an appropriate federal or state license. The proposed definitions are intended to clarify which activities cross that boundary.
The rule also addresses foreign-issued payment stablecoins. Digital asset service providers generally would be unable to make those tokens available unless the foreign issuer can comply with lawful orders and applicable reciprocal arrangements between the United States and the issuer’s home jurisdiction.
A second deadline arrives on July 18, 2028. Treasury said that from then, service providers generally may not offer or sell payment stablecoins to U.S. persons unless the stablecoins come from a licensed issuer. That makes the proposal relevant not only to issuers but also to exchanges, brokers, custodians, and payment platforms deciding which assets they can support.
What Treasury Wants the Market to Clarify
The full proposed rule asks stakeholders to comment on how the statutory terms should work in practice. Treasury said responses are due within 60 days after publication in the Federal Register and will be publicly viewable through Regulations.gov.
Treasury Secretary Scott Bessent said the department wants input that provides regulatory certainty while supporting innovation. The consultation follows an advance notice issued in September 2025 and is therefore a more developed rulemaking step rather than the start of the policy process.
Why the Definitions Matter
Stablecoin regulation increasingly turns on operational questions rather than broad statements of support. A definition that captures an offshore issuer, distributor, or interface can determine whether a token remains available in the world’s largest capital market. It can also affect how platforms structure listings and geographic access.
That distinction matters as banks and securities firms expand their digital-asset activity, a trend already visible in the institutional push by Morgan Stanley and BNY Mellon. The proposal is not final, and Treasury may change it after reviewing comments. For now, the document gives issuers and service providers their clearest view yet of how Section 3 could be applied.
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