The US Department of the Treasury has proposed rules defining when a payment stablecoin is issued, offered or sold in the United States, moving a central part of the GENIUS Act from statutory language toward an operating framework for issuers and digital-asset service providers.
The August 17 notice of proposed rulemaking addresses Section 3 of the law. Treasury said that beginning on January 18, 2027, the Act’s expected effective date, a person generally may not issue a payment stablecoin in the United States without an appropriate federal or state license.
The proposal is not a final rule. Comments will be due 60 days after the notice is published in the Federal Register, so Treasury has not yet supplied a calendar deadline on the release page.
Location would determine when issuance falls within scope
Under Treasury’s proposal, a person would be considered to issue a payment stablecoin in the United States if the issuer is located in the country at the time of issuance or issues the token to a person located in the United States. The proposed framework would also have extraterritorial effect when conduct involves offering or selling a payment stablecoin to a US-located person.
The distinction is operationally important for global issuers. A token’s blockchain or corporate domicile would not, on its own, settle whether a transaction falls within the proposed US perimeter. Providers would need to evaluate where the issuer and recipient are located at the relevant point in the process.
Treasury also says a payment-stablecoin issuer may qualify as a digital-asset service provider. The two regulatory roles are therefore not mutually exclusive, and a firm could face both issuance rules and rules governing how stablecoins are offered or sold.
Exchanges and other providers face a separate distribution test
The proposal implements the law’s restrictions for digital-asset service providers, a category that can include businesses exchanging digital assets, transferring them for customers, providing custody or participating in services related to issuance.
From July 18, 2028, the GENIUS Act generally prohibits such providers from offering or selling a payment stablecoin to a person in the United States unless it was issued by a permitted payment-stablecoin issuer. A separate requirement applying from the Act’s effective date addresses foreign-issued payment stablecoins: providers generally may not make them available in the United States unless the foreign issuer has the technological capability to comply, and will comply, with lawful orders and applicable reciprocal arrangements.
Treasury’s proposal lists conduct that could count as an offer or sale, including directly soliciting a US-located person, advertising a stablecoin as available for purchase by US persons, and advising potential buyers how to evade generally applicable location-detection or restriction controls.
For exchanges, custodians and wallet providers, the practical issue is broader than listing an approved token symbol. Compliance design may need to connect asset eligibility, customer location, marketing controls and evidence about a foreign issuer’s ability to respond to lawful orders. The proposal does not establish that any particular geolocation technology or vendor will satisfy the final standard.
Industry comments can shape the compliance boundary
Treasury is requesting feedback on the proposal’s extraterritorial reach, definitions, safe harbors and application to common or complex scenarios. The agency said the rule builds on an advance notice issued in September 2025.
Payments companies should treat the text as a design signal rather than a completed compliance specification. The final definitions could alter which issuance and distribution activities are captured, while the Act’s separate effective dates mean product access and licensing controls may need to be staged rather than switched on at one moment.