Treasury proposes rules restricting payment stablecoin issuance and sales
The proposed regulations bind U.S. issuers, digital asset service providers and foreign stablecoin issuers, with key prohibitions taking effect July 18, 2028.
The Department of the Treasury issued a notice of proposed rulemaking (RIN 1505-AC95, docket TREAS-DO-2026-0496) to implement section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Comments must be received on or before October 19, 2026.
Section 3(a) of the Act makes it unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States. Violations carry a fine of not more than $1 million for each violation, imprisonment for not more than five years, or both. Permitted issuers are U.S. subsidiaries of insured depository institutions approved under section 5, Federal qualified payment stablecoin issuers, or State qualified payment stablecoin issuers.
Section 3(b) creates two distinct prohibitions for digital asset service providers. Beginning July 18, 2028, a digital asset service provider may not offer or sell a payment stablecoin to a U.S. person unless the stablecoin is issued by a permitted issuer. A separate prohibition applies to stablecoins issued by foreign issuers unless the foreign issuer has the technological capability to comply with any lawful order and reciprocal arrangement under section 18.
The Act provides exemptions for (i) direct peer-to-peer transfers between individuals, (ii) transfers between accounts owned by the same individual abroad and domestically when offered by the same parent company, and (iii) transactions using a software or hardware wallet that enables an individual's own custody. Foreign issuers may also be exempt if they are supervised by a foreign regulator deemed comparable and are registered with the Office of the Comptroller of the Currency. Primary Federal payment stablecoin regulators may waive requirements for up to 12 months for subsidiaries of insured depository institutions and Federal qualified issuers with pending applications on the Act's effective date.
For further information, contact the Treasury's Office of General Counsel at the provided email or telephone number.