TLDR
- The U.S. Treasury proposed new federal definitions for stablecoin issuers under the GENIUS Act framework.
- The proposal opens a 60-day public comment period before Treasury moves toward a final rule.
- Treasury said payment stablecoins should not automatically follow traditional securities rules because they serve payment and settlement functions.
- Foreign stablecoin issuers, including major firms such as Tether, could face close review under the proposed framework.
- The GENIUS Act implementation timeline is already under pressure, with the July rulemaking target missed and a January 18 effective date approaching.
The U.S. Treasury Department has proposed a new GENIUS Act stablecoin rule that defines who can issue payment stablecoins and which businesses must follow the federal framework. The proposal moves the government closer to applying the new U.S. stablecoin law as agencies work through missed deadlines and unfinished rules.
Treasury Secretary Scott Bessent said the administration wants to move quickly and give businesses clearer rules. Treasury is working with banking and market regulators that also need to issue standards before the law can operate fully.
GENIUS Act Stablecoin Rule Sets Federal Definitions
The Treasury proposal focuses on the meaning of issuing a U.S. payment stablecoin and on the entities covered by the law. The department reviewed older securities rules for guidance but said payment stablecoins serve a different purpose because they support payments and settlement.
Treasury also said applying traditional investment rules too closely could interfere with cross-border payment activity. The GENIUS Act stablecoin rule therefore seeks a framework designed around payment use rather than treating stablecoins like standard investment products.
The proposal follows an advance notice Treasury released in September 2025. Stablecoin issuers, financial firms, and members of the public now have 60 days to submit comments on the proposed approach.
Treasury included dozens of questions that it must address before completing the final rule. Treasury may focus closely on foreign stablecoin issuers, including Tether, because the department must decide how federal requirements apply to companies operating outside the United States.
Deadlines Approach as Congress Weighs Changes
The GENIUS Act called for agencies to complete key rules within one year, but that target passed in July without full implementation. The law will take effect by January 18, although several rules may remain unfinished by that date.
The rulemaking process also overlaps with Congress’s Digital Asset Market Clarity Act. That bill could change parts of the GENIUS Act, including rules for stablecoin reward programs on exchanges.
The Clarity Act has faced delays after the Senate failed to begin key votes before the August recess. Treasury must now continue its own stablecoin rule process while lawmakers consider changes that could alter parts of the proposed framework. The comment period will give industry participants a chance to address definitions, foreign issuer treatment, compliance duties, and transition timelines.