Treasury opens comments on who may issue a stablecoin in America

The US Treasury has published the rule that will decide who may put a dollar stablecoin into American hands, and who may not. The notice of proposed rulemaking implements Section 3 of the GENIUS Act, the licensing core of the statute, and opens a 60-day comment window from its publication in the Federal Register. It is the most consequential document the stablecoin industry will read this year, and most of its force sits in definitions.

The law behind the rule

The GENIUS Act, signed in July 2025, did something no US law had done before: it created a federal category called the payment stablecoin and a licensing regime for issuing one. Issuers can qualify federally, through the banking agencies, or through state regimes certified as substantially similar, with a Stablecoin Certification Review Committee, chaired by the Treasury Secretary alongside the Federal Reserve and FDIC, deciding which state frameworks make the cut.

The statute settled the big architectural questions in 2025: full reserves in cash and short-dated instruments, redemption at par, no interest paid to holders, and supervision of issuers as financial institutions. What it left to Treasury was the boundary work, and boundary work is what this rule is.

From 18 January 2027, the Act's effective date, issuing a payment stablecoin in the United States without a federal or state licence becomes unlawful. The rule proposes what "issue a payment stablecoin in the United States" actually means, and, just as importantly, what it means to "offer or sell" one to a US person. Digital asset service providers, the exchanges, wallets and brokers that put stablecoins in front of customers, get a longer runway, to 18 July 2028, before their own compliance obligations fully bite.

How Washington got here

The road to this rulemaking runs through seven years of failed attempts and one disaster. Facebook's Libra announcement in 2019 dragged stablecoins into congressional hearings and convinced both parties that the category was too large to ignore. The President's Working Group report of late 2021 recommended that stablecoin issuance be confined to insured depository institutions, a position the industry fought and Congress never enacted. Draft bills circulated through 2022 and 2023 without reaching a floor vote.

What changed the politics was Terra. The collapse of the UST algorithmic stablecoin in May 2022 erased roughly 40 billion dollars in days and gave every legislator a concrete answer to the question of what could go wrong. The eventual legislative bargain took shape around a clean trade: full-reserve, supervised, non-interest-bearing payment stablecoins would get a federal charter and legal certainty, and everything else, algorithmic designs, yield-bearing structures, would sit outside the perimeter. The GENIUS Act, signed in July 2025, wrote that trade into law. This rulemaking is the machinery that makes it operational.

Why the definitions are the fight

Every serious question in stablecoin regulation eventually becomes a jurisdictional one, and the phrase doing the work here is "to a US person."

Read narrowly, offering and selling could capture only direct primary-market activity: an issuer minting for an American customer. Read broadly, it could reach any secondary-market venue where Americans trade, any wallet that displays a balance to a US IP address, any decentralised pool a US person can reach. Somewhere between those poles sits the actual rule, and the sixty days of comments now open are the industry's one formal chance to move it.

The stakes concentrate on the largest issuer in the market. Tether's USDT accounts for the majority of global stablecoin supply, roughly 183 billion dollars at the time of writing, and it is issued offshore by a company that has never sought a US licence. The GENIUS Act contemplates a path for foreign issuers operating under comparable regimes, but comparability is a determination, not a description, and this rule is where the mechanics of foreign access get written. Whether USDT remains freely available to American users in 2027, retreats to offshore venues, or restructures into a licensed vehicle depends to an uncomfortable degree on how a few defined terms come out of this comment period.

For issuers already inside the US perimeter, the calculus is different. Circle built its business on the bet that regulation would eventually reward the compliant, and a hard licensing boundary is that bet paying out. The same logic applies to the bank consortium announced this week, twenty-one institutions building a jointly owned issuer with GENIUS compliance stated as a design goal, and to the card networks' Open Standard venture. A rule that raises the cost of unlicensed issuance is, mechanically, a subsidy to everyone who holds a licence.

The licensing map in practice

The statute offers issuers two doors. The federal route runs through the banking agencies, with the OCC supervising nonbank issuers organised as federally qualified entities. The state route preserves regimes like New York's, where the Department of Financial Services has chartered trust-company issuers since 2015 and already supervises Paxos, issuer of PYUSD and USDG, under exactly the model the Act generalises. A state regime qualifies only if the Stablecoin Certification Review Committee certifies it as substantially similar to the federal standard, which makes the SCRC, Treasury, the Federal Reserve and the FDIC around one table, the quiet arbiter of American stablecoin geography.

The positioning race is already visible. Circle has pursued national trust status to sit squarely inside the federal perimeter. Paxos holds the New York charter that the state route was effectively designed around. The bank consortium announced this week begins with twenty-one institutions that are already supervised. The rule's definitions decide the size of the market; the licensing map decides who is standing inside it when the boundary goes up.

The companion rule on illicit finance

This proposal does not travel alone. Treasury has also proposed a companion rule implementing the Act's Bank Secrecy Act requirements, which treats permitted payment stablecoin issuers as financial institutions in their own right, with full anti-money-laundering programme obligations, sanctions screening and reporting duties. Taken together, the pair completes a thought: the issuance rule decides who may mint, and the BSA rule decides what minting obliges them to watch. For issuers accustomed to operating through banking partners' compliance programmes, direct financial-institution status is a substantial operational lift, and the two comment files will be read side by side.

The dollar policy underneath

Treasury has been unusually explicit that this is currency policy as much as financial regulation. Secretary Scott Bessent framed the rulemaking as providing the regulatory certainty businesses need while cementing the dollar's role as the world's reserve currency, and the argument has a straightforward mechanism behind it.

Payment stablecoins under the GENIUS Act must hold reserves in cash and short-dated Treasury instruments. Every dollar of stablecoin supply is therefore, in effect, a dollar of demand for US government paper, distributed through channels that reach users conventional banking does not: a merchant in Lagos, a treasurer in São Paulo, a saver in Buenos Aires. Roughly 300 billion dollars of stablecoin supply already works this way. A licensing regime that makes the category safe for institutions is also a machine for exporting demand for the dollar, and Washington has noticed.

The foreign-relations wrinkle is that other jurisdictions have noticed too. The European Union's MiCA regime has applied to stablecoins since 2024, Singapore published its own draft legislation this week, and each framework includes some mechanism for recognising issuers regulated elsewhere. Whether these regimes interlock into something like passporting, or harden into competing blocs, will be decided in exactly the kind of definitional rulemaking now under way.

Product by product

Run the existing market through the rule's frame and the sorting is stark.

USDC is the cleanest fit: a US issuer that built for regulation and now gets the moat it paid for. PYUSD, issued by Paxos under New York trust supervision, is arguably even better positioned, since its regulator is the template for the state route. The bank consortium token and the card networks' Open USD are being designed inside the regime from the first meeting.

USDT is the open question this rule exists to answer. An offshore issuer with majority market share and no US licence must, by January 2027, either qualify through the foreign-issuer path, restructure into a licensed vehicle, or watch its American distribution narrow as service providers de-list ahead of their 2028 deadline.

And USDe, the synthetic dollar whose card programme launched this same week, sits deliberately outside the category: not a payment stablecoin under the Act, not entitled to the regime's blessing, and not bound by its interest prohibition. The statute drew a bright line around fully reserved payment instruments precisely so that everything else would be legible as something different. Expect the space just outside the perimeter to be where the most inventive products, and the hardest supervisory questions, now accumulate.

What changes for whom

For licensed and would-be issuers, the rule sets the boundary of the addressable market and the compliance perimeter around it. The practical work of 2026 is scoping: which activities constitute issuance, which distribution arrangements constitute offers, and how existing products need to be restructured before January 2027.

For exchanges and wallets, the questions are listing and geography. A service provider that continues to offer an unlicensed foreign stablecoin to US persons after the phase-in will be the enforcement target the statute was built to create. The 2028 date looks generous until you count the engineering quarters between now and then.

For corporate users, nothing is required, and that is the point. The regime is designed so that by the time it fully applies, holding and settling in a licensed payment stablecoin is a compliance non-event, an instrument as boring as the money-market fund it economically resembles.

And for the comment file: expect the sharpest submissions to converge on three questions. Where secondary-market trading ends and offering begins. What comparability requires of foreign regimes, and who bears the burden of proving it. And how the rule treats software, the wallets and protocols that touch stablecoins without ever holding them, where the statute's language will be stretched hardest.

The enforcement question

A perimeter is only as real as its enforcement, and the offshore precedents are instructive. American regulators have shown, repeatedly, that they can reach exchanges and issuers with no US entity when American users are involved: the criminal and civil actions that ended with Binance's multi-billion-dollar settlement in 2023 established that serving US persons from abroad, at scale, eventually collects a bill. The GENIUS regime converts that ad hoc enforcement posture into a standing licensing offence with a date attached, which is administratively far easier to prosecute.

The soft edge of the perimeter is software. A licensed exchange can geofence; a smart contract cannot. Treasury's rule will have to say how far the offer-and-sell language reaches into interfaces, front ends and self-custodial tooling, and that boundary, more than any other, will decide whether the regime reads as payments regulation or as an attempt to license the internet. The comment file from the software industry will be worth reading in full.

What a licence actually buys

It is worth being concrete about the prize, because the burdens are obvious and the benefits diffuse. A licensed issuer gets: listings on every regulated US venue without legal ambiguity; bank counterparties that can hold and settle the token under their own supervisors' gaze; corporate treasury policies that can approve the asset by citing a statute rather than a memo; and eligibility for the recognition regimes now being drafted abroad, Singapore's proposal this week names GENIUS licensing as a qualifying credential. The licence is not a compliance cost. It is the product's admission ticket to the balance sheets where the next 500 billion dollars of demand lives.

The view from abroad

The rule also lands into an increasingly synchronised world. The European Union has run MiCA's stablecoin provisions since 2024. Singapore published its own draft legislation this week, with full reserves, an interest ban and a recognition path for GENIUS and MiCA issuers. Hong Kong's ordinance and the UK's regime fill in the map. The convergence is real: every serious jurisdiction has landed on the same shape, licensed issuers, full reserves, no yield. What remains unsettled is mutual recognition, and Treasury's comparability determinations for foreign issuers are the American half of that negotiation. The stablecoin trade wars, if they come, will be fought in exactly these annexes.

The timeline from here

Sixty days of comments. A final rule, realistically, in 2027, with the statute's effective date of 18 January 2027 arriving first, licences or no licences, and the service-provider deadline of 18 July 2028 closing the loop. Sixteen months from now, issuing a dollar stablecoin to Americans without a licence stops being a business model and becomes a violation.

The industry asked Washington for clarity for a decade. This is what clarity looks like: a Federal Register document, a comment portal, and a date.