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The US Treasury Department proposed new rules Monday detailing how stablecoin issuers and digital asset service providers would comply with key provisions of the $GENIUS Act.
The Notice of Proposed Rulemaking focuses on Section 3 of the law, defining when a payment stablecoin is considered issued in the United States and when a platform is considered to offer or sell a stablecoin to someone in the country.
The proposal is scheduled for publication in the Federal Register on Aug. 18, with comments accepted for 60 days.
Under the proposal, a stablecoin would generally be considered issued in the US if the issuer is located in the country at the time of issuance or if the stablecoin is issued to someone located in the US.
For individuals, Treasury would generally look at physical presence, while US incorporation or a principal place of business in the country would determine the location of companies.
Foreign issuers could avoid being treated as issuing in the US if they reasonably believe recipients are outside the country, maintain controls designed to prevent issuance to people located in the US, and do not target US users through advertising or solicitation.
The $GENIUS Act is expected to take effect on Jan. 18, 2027. From that point, companies generally will not be allowed to issue payment stablecoins in the US without authorization under the federal or state regulatory framework, subject to exceptions for qualifying foreign issuers.
Beginning July 18, 2028, digital asset service providers would generally be prohibited from offering or selling stablecoins to people located in the US unless they were issued by a permitted payment stablecoin issuer or a qualifying foreign issuer.
Foreign issuers would also need the technological capability to comply with lawful US orders and applicable reciprocal arrangements.
Treasury’s proposal gives several examples of what could constitute offering or selling a stablecoin in the US, including directly soliciting US 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.
Platforms could receive protection if they reasonably believe the customer is outside the US, maintain controls designed to prevent sales to people in the country, and avoid advertising or solicitation targeting US users.
The proposal also exempts certain direct transfers between individuals and transactions involving self custody wallets from the Section 3 prohibitions.
Treasury is also seeking industry feedback on how the framework should apply to activities including airdrops, stablecoin buybacks, wrapped tokens, blockchain bridges, market makers and transfers to exchanges or liquidity providers.
The proposal is one part of a broader implementation of the $GENIUS Act. Treasury, FinCEN and OFAC previously proposed rules covering anti money laundering and sanctions compliance requirements for permitted stablecoin issuers in April.
The $GENIUS Act was signed into law in July 2025 and requires payment stablecoins to maintain reserves backing their outstanding tokens on a one to one basis using eligible assets including cash, deposits and short term Treasury securities.