The Treasury Department issued a Notice of Proposed Rulemaking on Monday covering Section 3 of the GENIUS Act — the section that decides who is allowed to issue, offer or sell a dollar-pegged stablecoin to anyone in the United States. It landed in the Federal Register on Tuesday. Comments close on 19 October.
That sounds like plumbing. It is not. Section 3 is not the reserve rules or the audit rules; it is the definitions. What does it mean to “issue a payment stablecoin in the United States”? What does it mean to “offer or sell” one to a US person? Every consequence downstream — who needs a licence, which foreign issuers survive on US exchanges, what an offshore structure has to look like to sit outside the perimeter — hangs off those two phrases.
The clock is why it matters this week. The GENIUS Act takes effect on 18 January 2027. The statute’s own one-year deadline for having implementing rules in place passed last month without the administration meeting it. Comments close in mid-October, which leaves Treasury roughly three months to read them and produce a final rule before the law is live.
The 2028 date is the one with teeth
The deadline the industry is actually organised around is 18 July 2028. From then, digital asset service providers generally cannot offer or sell payment stablecoins to people in the US unless the token comes from a licensed issuer. Foreign issuers face an extra hurdle on top: they have to be able to comply with US legal orders, and a reciprocal arrangement has to exist.
That is a precisely aimed problem for the largest stablecoin in the world. Tether is offshore, and CoinDesk reported in July that USDT had entered a two-year countdown on its position on US platforms. Whether that countdown bites depends entirely on how Treasury ends up writing “offer or sell.”
The domestic side has been building for this for two years. The OCC has chartered a cluster of national trust banks aimed squarely at the business — Ripple, Circle, Paxos, BitGo, Fidelity and Crypto.com among them. Ripple National Trust Bank took conditional approval in December 2025 and is the vehicle intended to hold RLUSD reserves. Those firms spent real money to be inside the fence. Section 3 draws the fence.
Treasury tipped its hand slightly
The proposal says the department looked at securities law as a reference point, given its “longstanding legal regimes that address the issue, offer, and sale of other financial instruments.” Then it backed away from it: Treasury believes 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.”
Treasury Secretary Scott Bessent framed Monday’s move as an attempt to “provide the regulatory certainty businesses need to innovate and grow in America.” The proposal itself poses dozens of open questions, each of which has to be answered before a final rule.
Our take: Definitions are where regulation actually happens. A rule that reads as procedural is the difference between a US stablecoin market with three licensed issuers and a market where the offshore incumbent keeps most of its share through a structure nobody bothered to close. Treasury signalling that it does not want to bolt securities-style rules onto a payment instrument is meaningful — but a preamble is not a final rule, and there are still dozens of unanswered questions between here and January.
What to watch
- 19 October. Comments close. The interesting filings will be banks and exchanges fighting over stablecoin rewards, not the technical definitions.
- The CLARITY Act. It would rewrite parts of GENIUS, including the rewards question. It failed to start key votes before the Senate left for August recess, so it is on shaky footing.
- The parallel proposals. The OCC and FDIC have their own notices out for the issuers they supervise. Treasury’s Section 3 piece is one layer of a taller stack.
- Federal Reserve master accounts. A trust charter without one is a partial answer for any issuer that wants to hold reserves at the Fed.
- 18 January 2027, then 18 July 2028. The first is when the law switches on. The second is when US platforms have to stop selling unlicensed tokens.