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The Treasury Department issued a Notice of Proposed Rulemaking today, laying out how it plans to implement Section 3 of the GENIUS Act, the provision governing who can legally issue a payment stablecoin in the U.S. and when platforms can offer one built by a foreign issuer.
What's the Scoop?
- Two dates that matter: Starting in Jan. 2027, issuing a payment stablecoin in the U.S. without a federal or state license becomes unlawful, unless the issuer is foreign, comes from a jurisdiction Treasury deems comparable, and has registered with the OCC. Starting July 18, 2028, digital asset service providers can't offer or sell stablecoins to U.S. persons at all unless a licensed issuer created them.
- A new duty for exchanges: Platforms listing offshore stablecoins can't just take an issuer's word that it'll comply with US orders. Treasury's proposal requires "reasonable due diligence" first, confirming at minimum that no secondary-trading ban is in force against the issuer, before a platform can rely on that issuer's own representation.
- No securities-law playbook: Rather than borrowing from securities regulation, Treasury proposed a conduct test: a foreign issuer isn't considered to have "issued" in the U.S. if it reasonably believes its buyers are abroad, keeps real operational controls (not just paper policy), and doesn't market to U.S. persons. Knowing participation in an unlawful issuance, including market-making, white-labeling, or coordinating minting, can carry fines up to $1 million and five years in prison per violation.
- A softer option got dropped: Treasury considered a 36-month transition runway plus a carve-out for offshore tokens under roughly $1 billion in US-held market cap, then set it aside, deciding the delayed consumer protection wasn't worth the smoother rollout. Circle had specifically pushed for identical rules regardless of issuer type.
- What's next: The proposal poses 87 separate questions for commenters and opens a 60-day window once it publishes in the Federal Register on Tuesday.
