The U.S. Treasury Department has proposed another major piece of the regulatory framework for payment stablecoins, setting out rules governing domestic issuance and the conditions under which foreign-issued tokens can be offered to U.S. customers. Treasury released the notice of proposed rulemaking on August 17 and opened a 60-day public-comment period. The proposal implements Section 3 of the GENIUS Act and focuses on defining when a payment stablecoin is issued, offered or sold “in the United States.”
The distinction has significant consequences for companies including stablecoin issuers, crypto exchanges and other digital-asset service providers. President Donald Trump signed the GENIUS Act into law on July 18, 2025, creating the first comprehensive U.S. federal framework specifically for payment stablecoins. Treasury says the law is expected to become effective January 18, 2027.
Treasury Draws the Boundary Around U.S. Stablecoins
Beginning when the relevant provisions take effect, companies generally cannot issue payment stablecoins in the United States unless they qualify as permitted payment stablecoin issuers under federal or eligible state regulatory frameworks. The new proposal attempts to establish when an issuer has crossed that U.S. regulatory boundary. That question becomes particularly complicated for blockchain products because stablecoins can be issued on decentralized networks, transferred globally and accessed through exchanges located in multiple jurisdictions.
Treasury is also seeking feedback on possible limited safe harbors. The GENIUS Act authorizes exemptions for de minimis transaction volumes and, separately, unusual and exigent circumstances, provided those exceptions remain limited and consistent with the law’s objectives. The broader regulatory framework requires permitted issuers to meet standards involving reserve assets, redemption, capital, risk management, audits and supervision. Other agencies are developing complementary rules. The OCC has proposed regulations covering reserve requirements, redemption, custody and supervision, while Treasury’s FinCEN and OFAC proposed anti-money-laundering and sanctions requirements in April.
Foreign Stablecoins Face a Separate Test
Foreign-issued stablecoins represent another major focus of the proposal. The GENIUS Act ultimately restricts digital-asset service providers from offering or selling stablecoins to U.S. customers unless the token is issued by an approved U.S. issuer or qualifies under the foreign-issuer framework. Foreign issuers can remain accessible if Treasury determines their home jurisdiction maintains a regulatory and supervisory regime comparable to the U.S. framework and the issuer satisfies additional statutory conditions. Those conditions include the ability to comply with lawful U.S. orders, including requirements involving asset freezes, seizures, sanctions and anti-money-laundering measures. The restrictions on digital-asset service providers offering non-qualifying stablecoins are scheduled to become applicable three years after enactment, on July 18, 2028.
The foreign framework could become particularly consequential for globally distributed dollar stablecoins. A token does not necessarily become compliant simply because its issuer is regulated overseas; the relevant jurisdiction and issuer must satisfy the standards established under the GENIUS Act. Treasury’s proposal is therefore about more than licensing American stablecoin companies. It begins defining the regulatory perimeter around the U.S. stablecoin market itself. With domestic licensing, reserve rules, AML requirements and foreign-issuer standards now moving through rulemaking, the GENIUS Act is shifting from legislation into an operating regulatory system — one that will determine which digital dollars can legally be issued in America and which overseas stablecoins U.S. platforms can ultimately continue offering.
