The US Treasury Department published its first major rule implementing the GENIUS Act on August 17, proposing an 87-page framework that defines when a payment stablecoin is issued, offered, or sold in the United States and opening a 60-day public comment period.
The notice of proposed rulemaking, or NPRM, implements Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, signed into law by President Trump in July 2025. Treasury Secretary Scott Bessent announced the action, calling it a critical step in cementing the role of the US dollar as the world’s reserve currency.
Licensing Deadlines and Reserve Requirements
The proposal establishes the boundaries that determine when a company must hold a federal or state license to issue or distribute stablecoins. Under the framework, stablecoin issuers will need appropriate licensing by January 18, 2027. A second deadline on July 18, 2028 bars digital asset service providers from offering unlicensed stablecoins to US users. Knowingly violating these provisions carries fines up to $1 million and prison terms of up to five years.
Stablecoin reserves must consist of high-quality liquid assets, including US Treasury securities with maturities of 93 days or less, central bank reserve deposits, and overnight repurchase agreements backed by eligible Treasury securities. Pledging or rehypothecating reserve assets would be permitted only for specific margin obligations and custodial functions. Issuers must maintain daily disclosures on the par value of outstanding stablecoins and the composition of their reserve holdings.
Foreign Issuers Like Tether Face New Rules
The proposal drew particular attention for how it addresses foreign stablecoin issuers. Tether, the largest stablecoin issuer with a market value near $183 billion, would face new access requirements. Under the law, service providers may offer a foreign-issued stablecoin only if the issuer can comply with lawful US orders and if reciprocal arrangements exist between the countries. Treasury posed dozens of questions seeking public input on how to calibrate these cross-border rules.
Treasury welcomes input from stakeholders as we work to provide the regulatory certainty businesses need to innovate and grow in America, cement the role of the US dollar as the world’s reserve currency and keep America the crypto capital of the world.
Parallel AML Framework Advances
In a separate but related action, FinCEN and the Office of Foreign Assets Control published a joint proposed rule requiring stablecoin issuers to build anti-money laundering and sanctions compliance programs. The rule marks the first time federal law explicitly mandates such programs for a specific category of US persons. Issuers must have the technical capability to block, freeze, and reject transactions involving sanctioned persons or jurisdictions, and must be able to seize or burn stablecoins when ordered by a court.
The FDIC also issued its own proposed rulemaking in April to implement GENIUS Act provisions for FDIC-supervised institutions, creating a unified federal framework alongside the Treasury and NCUA. The 60-day comment period gives the industry its first real chance to shape the final contours of US stablecoin regulation, with the broader GENIUS Act licensing framework taking full effect in January 2027.
Sources: CoinPaprika; Mondaq/WilmerHale; Treasury Department; Global Relay
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