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Key takeaways
- Treasury's August 2026 proposal defines what it means to issue, offer or sell a payment stablecoin in the United States, which decides who needs a GENIUS Act license.
- Two dates matter: the Act is expected to take effect January 18, 2027, and from July 18, 2028 US platforms generally may not offer stablecoins from unlicensed issuers to people in the US.
- Self-custody wallets and direct person-to-person transfers are exempt, so the rule mainly affects issuers and the exchanges and apps that list stablecoins. Comments are due October 19, 2026.
The US Treasury has proposed the rule that decides which stablecoins can legally be issued and sold to people in the United States under the GENIUS Act. It is a technical document, but it will shape which dollar tokens US exchanges and apps can list from 2027 onward.
What happened
On August 17, 2026 Treasury announced a notice of proposed rulemaking (NPRM) implementing section 3 of the GENIUS Act, the federal stablecoin law signed in July 2025. It was published in the Federal Register the next day. Comments are open until October 19, 2026.
Section 3 is the core gatekeeping part of the law. It says who may issue a stablecoin "in the United States" and who may offer or sell one to people here. The Act never defined those phrases, so Treasury's proposal fills in the meaning.
This is one piece of a larger rulebook. Bank regulators have proposed their own GENIUS rules: the OCC in February, then the FDIC and the NCUA, according to Chapman and Cutler's tracker. In April, Treasury's FinCEN proposed anti-money-laundering requirements for issuers.
The key dates
| Date | What happens |
|---|---|
| October 19, 2026 | Comment period on Treasury's section 3 proposal closes. |
| January 18, 2027 | Expected effective date of the Act. From then, issuing a payment stablecoin in the US generally requires a federal or state license, and platforms face conditions on offering foreign-issued stablecoins. |
| July 18, 2028 | Platforms generally may not offer or sell a payment stablecoin to a person in the US unless a licensed issuer, or a qualifying foreign issuer, issued it. |
Chapman notes the Act technically takes effect on the earlier of January 18, 2027 or 120 days after final rules are issued.
What the proposal says
When is a stablecoin "issued in the United States"?
Treasury proposes a location-based test. An issuance counts as US issuance if, at that moment, either the issuer or the person receiving the newly issued coins is located in the US. If neither is in the US, the rule does not reach it.
A foreign issuer can avoid liability if four conditions are met: it is not located in the US, it reasonably believes no recipient is in the US, it has working controls to keep US persons out, and it does not market to Americans. Treasury stresses that those controls must actually operate in practice and be updated over time.
Foreign issuers get a path in
Treasury reads the Act as allowing foreign issuers to issue directly in the US if they meet the section 18 conditions. These include supervision under a home-country regime that Treasury finds comparable and registration with the OCC. Treasury argues that blocking them would push issuance into extra steps that are harder for US regulators to see.
Who counts as "participating" in an illegal issuance
Knowingly taking part in an unlicensed issuance can carry criminal penalties of up to $1 million per violation and five years in prison under the Act. The proposal gives three non-exhaustive examples of participation:
- Taking on an obligation to redeem the coin, including as a backup for the issuer.
- Coordinating key steps such as minting or recruiting customers. A brand that lends its name to a "white label" stablecoin could fall here.
- Making a market in, distributing or listing newly issued coins around the time of issuance. Treasury says this would cover an exchange giving an unlicensed stablecoin its initial listing.
What counts as offering or selling to Americans
For exchanges and other "digital asset service providers," the proposal lists activities that count as an offer or sale to a person in the US. These include directly soliciting a US person, advertising a coin as available to US buyers, and replying to an unsolicited US inquiry by indicating a willingness to sell. Telling customers how to get around IP blocks or other location checks also counts.
Before offering a foreign-issued stablecoin, a platform may rely on the issuer's statement that it can and will comply with lawful US orders, such as freezes. It may do so only after reasonable due diligence, and not if it knows or should know the statement is false. Treasury explicitly asks whether platforms should have to check a token's smart contract for working "freeze," "seize" and "burn" functions.
What stays exempt
The Act and the proposal carve out three kinds of activity, which matters most for individual users:
- Direct transfers between two individuals acting for themselves, with no intermediary.
- Moves between your own US account and your own foreign account at the same parent company.
- Transactions through a software or hardware wallet that lets you hold your own assets.
The open questions
Treasury put unusually broad alternatives on the table, and the final rule could look quite different:
- A stricter line. One alternative would make any issuance or sale to a US person unlawful regardless of the issuer's diligence. Good-faith efforts would then matter only for whether criminal penalties apply.
- A securities-style model. Another would borrow from Regulation S under securities law, using "offshore transaction" and "directed selling efforts" tests. Under that approach, US-focused liquidity incentives or wallet integrations could count as targeting Americans.
- Airdrops and funds. Treasury asks whether giving away a stablecoin for free counts as an "offer." It also asks how the rules should apply when a fund pays dividends in stablecoins.
What it means for regular users
For most people, the near-term impact is indirect but real:
- Listings may change by 2028. US exchanges and apps will need to show that the stablecoins they offer come from licensed or qualifying foreign issuers. Stablecoins that do not get there could become harder to buy on US platforms. We do not know yet which tokens will qualify; watch issuer announcements for widely used coins such as USDC and USDT.
- Freeze powers are part of the design. The rule assumes issuers can comply with lawful orders, which in practice means freezing or blocking tokens. That is useful against theft and sanctions evasion, but it is a reminder that a regulated stablecoin is a claim on a company, not a bearer asset like bitcoin.
- Geo-blocks will tighten. Offshore platforms face clearer liability for serving US users. Avoid services that tell you to use a VPN to get around location checks; the proposal specifically treats that advice as a prohibited sales practice.
What to watch next
- Public comments. Comments are posted publicly on Regulations.gov. Positions from large issuers and exchanges will signal how they plan to comply.
- Comparability decisions. Treasury's findings on which foreign regimes count as "comparable" will decide how easily offshore stablecoins reach US users.
- Final bank-regulator rules. The OCC, FDIC and NCUA rules set capital, liquidity and reserve standards for licensed issuers. Together with this rule, they will define what a "permitted" stablecoin looks like.
Browse stablecoins we profile in the stablecoin category, and see our regulation hub for the wider US picture. Details are as of October 2026.
Frequently asked questions
Will my stablecoins be frozen or banned in 2027?
Nothing in the proposal seizes or bans coins people already hold. It sets rules for issuers and for platforms that offer or sell stablecoins, with the main offer-and-sale deadline in July 2028.
Are transfers from my own wallet covered?
The Act and the proposal exempt transactions made through a software or hardware wallet that lets you hold your own assets, and direct transfers between two individuals with no intermediary.
Can foreign stablecoin issuers still serve US users?
Under the proposal, a foreign issuer can issue in the US if its home country's rules are judged comparable by Treasury and it registers with the OCC, among other conditions.
Is this rule final?
No. It is a notice of proposed rulemaking. Treasury is taking public comments until October 19, 2026 and may change the text before finalizing it.
Sources
- Treasury Seeks Public Comment on GENIUS Act Proposed Rulemaking — U.S. Department of the Treasury
- GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale (Proposed Rule) — Federal Register
- GENIUS Act Rulemaking and Reporting Tracker — Chapman and Cutler
- Treasury Proposes Rule to Implement the GENIUS Act's Requirements to Counter Illicit Finance — U.S. Department of the Treasury
- GENIUS Act Regulations: Notice of Proposed Rulemaking (OCC Bulletin 2026-3) — Office of the Comptroller of the Currency
Published October 4, 2026 by The Crypto Guide editorial team. Educational content, not financial, legal or tax advice. Spot an error? Request a correction.