Treasury proposes GENIUS Act stablecoin rules, misses deadline ahead of January 2027 launch

The U.S. Department of the Treasury has proposed federal definitions and jurisdictional rules to implement the GENIUS Act stablecoin legislation, according to CoinDesk, opening a 60-day public comment period with a deadline in mid-October. The move comes months after the law's one-year rulemaking target passed last month without the administration meeting that requirement, compressing the timeline ahead of the legislation's January 18, 2027 effective date.

Under the GENIUS Act, entities cannot generally issue payment stablecoins in the U.S. without obtaining an appropriate federal or state license, per The Block. The Treasury's proposal establishes the framework for those definitions and jurisdictions but leaves dozens of interpretive questions unanswered, each requiring resolution before final sign-off. Treasury Secretary Scott Bessent stated the administration is moving quickly to put rules in place "as we work to provide the regulatory certainty businesses need to innovate and grow in America, cement the role of the U.S. dollar as the world's reserve currency, and keep America the crypto capital of the world," according to CoinDesk.

The Treasury explicitly notes in its proposal that "the Act evinces a clear intent for payment stablecoins to serve as an effective means of payment and settlement, including across borders, and application of traditional investment rules to payment stablecoins may frustrate that goal," per CoinDesk. That language signals the agency's intent to carve out a distinct regulatory lane for stablecoins rather than force them into existing securities or payment-system frameworks, though the specifics remain to be defined.

The industry will scrutinize how the Treasury approaches foreign issuers, particularly Tether, the largest stablecoin operator globally but a company incorporated outside the U.S., according to CoinDesk. The proposed rule does not yet answer this question, leaving it open for public comment and internal deliberation. The Treasury issued an advance notice of rulemaking in September of last year, which this proposal follows.

Implementation faces a tight schedule. Sources told CoinDesk it is unlikely all rules will be finalized by the January 18 effective date, and new regulations typically come with transition periods allowing industries time to comply. No specific grace period or enforcement timeline has been announced. Adding to the regulatory fog, the competing Digital Asset Market Clarity Act, which would rewrite portions of the GENIUS Act most notably its treatment of rewards programs for stablecoin customers on exchanges, is on shaky ground after failing to begin key votes in August before the Senate recess, per CoinDesk.