Treasury Proposes Rules Spelling Out Who Needs a License to Issue Stablecoins in the US

The US Treasury Department moved forward on regulating dollar-pegged stablecoins on 17 August 2026, issuing a Notice of Proposed Rulemaking (NPRM) that would define exactly when a company is considered to be "issuing" or "offering and selling" a payment stablecoin inside the United States. The rule implements Section 3 of the GENIUS Act — the Guiding and Establishing National Innovation for US Stablecoins Act — the federal law that created the first dedicated licensing framework for dollar-backed stablecoins.

Under the GENIUS Act's timeline, starting 18 January 2027, anyone issuing a payment stablecoin in the US will generally need to hold an appropriate federal or state license. Foreign-issued stablecoins face a separate restriction: digital asset service providers cannot offer or sell them in the US unless the foreign issuer can technically comply with US legal orders and a reciprocal arrangement exists between the US and the issuer's home country. A further, broader restriction arrives 18 July 2028, when digital asset service providers will generally be barred from offering or selling any payment stablecoin — foreign or domestic — to persons in the United States unless it comes from a licensed issuer.

Treasury Secretary Scott Bessent framed the move as an effort to give industry regulatory certainty while "cementing the role of the US dollar as the world's reserve currency." Public comments are due within 60 days of the rule's publication in the Federal Register.

What the Rule Actually Defines

The core of the Notice of Proposed Rulemaking is definitional rather than substantive: it spells out what it legally means to "issue a payment stablecoin in the United States" and to "offer or sell" one "to a person in the United States." Those two phrases are the triggers written into the GENIUS Act itself for when its licensing requirements apply, but the underlying statute did not spell out exactly how to determine where an issuance or a sale takes place — a question that matters for a product that, by design, moves across borders instantly online. Treasury's proposed rule is meant to close that gap, giving stablecoin issuers and the exchanges, wallets and platforms that distribute them a clearer test for when GENIUS Act licensing obligations apply.

The Compliance Timeline

The GENIUS Act's licensing regime does not take effect all at once. From 18 January 2027 — the law's expected effective date — a person generally cannot issue a payment stablecoin in the US without an appropriate federal or state license. Alongside that, digital asset service providers are barred from offering, selling or otherwise making foreign-issued stablecoins available in the US unless the foreign issuer has both the technical capability and the legal commitment to comply with US orders, backed by a reciprocal arrangement between the US and that issuer's home jurisdiction. A second, more sweeping restriction follows on 18 July 2028: from that date, digital asset service providers generally cannot offer or sell any payment stablecoin to a person in the United States unless it was issued by a licensed issuer, regardless of where that issuer is based.

Building on Last Year's Groundwork

This NPRM is not Treasury's first step on this rule. It builds on an Advance Notice of Proposed Rulemaking (ANPRM) the department issued in September 2025, which sought broad public input on how to implement the GENIUS Act, including questions of regulatory clarity, Bank Secrecy Act anti-money-laundering obligations, sanctions compliance, the balance between state and federal oversight, treatment of comparable foreign regulatory regimes, and tax treatment. The new NPRM narrows that broad inquiry down to the specific "issue" and "offer or sell" definitions under Section 3 of the Act.

Why It Matters

Stablecoins — cryptocurrencies designed to hold a stable value, typically pegged one-to-one to the US dollar and backed by reserves — have grown into a market worth hundreds of billions of dollars used heavily in crypto trading and, increasingly, in cross-border payments. The GENIUS Act, once implemented, will be the first dedicated federal licensing regime for dollar-pegged stablecoins in the US, and how Treasury defines "issuance" and "sale" within US borders will determine which companies — including large offshore stablecoin issuers — fall under its jurisdiction. Treasury is accepting public comments on the proposed rule for 60 days following its publication in the Federal Register; those comments will be publicly viewable at regulations.gov.

Reader Q&A

What is a "payment stablecoin" under the GENIUS Act?

Treasury's release doesn't restate the GENIUS Act's statutory definition in full, but the law generally refers to payment stablecoins as digital assets designed to maintain a stable value, typically pegged to the US dollar, and used for payments. The Act creates a licensing regime specifically for entities that issue this type of asset in the US.

Does this rule ban any stablecoins?

No. It defines when GENIUS Act licensing requirements apply — specifically what counts as "issuing" a stablecoin "in the United States" and what counts as "offering or selling" one "to a person in the United States." It does not itself prohibit stablecoins; the underlying GENIUS Act requires licensing for issuance starting January 18, 2027, and restricts sales of unlicensed stablecoins to US persons starting July 18, 2028.

How does this affect stablecoins issued outside the US?

Foreign-issued stablecoins can still be offered or sold in the US before the licensing deadlines, but only if the foreign issuer can demonstrate the technical capability and legal commitment to comply with US orders, underpinned by a reciprocal arrangement between the US and the issuer's home jurisdiction. From July 18, 2028, any stablecoin — foreign or domestic — sold to a US person generally must come from a licensed issuer.

Can the public weigh in on this rule before it's finalized?

Yes. Treasury opened a 60-day comment period starting from the rule's publication in the Federal Register, and all submitted comments will be publicly viewable at regulations.gov. This NPRM follows an earlier Advance Notice of Proposed Rulemaking from September 2025, which already gathered broad public input on GENIUS Act implementation.