Treasury Proposes GENIUS Act Section 3 Stablecoin Rules Defining Who May Issue in the U.S.

The Treasury Department published a Notice of Proposed Rulemaking on August 17, 2026 implementing Section 3 of the GENIUS Act, establishing the framework that governs the issuance, offer, sale, and making-available of payment stablecoins in the United States. The rule defines what counts as issuing, offering, or selling a payment stablecoin domestically, and defines a payment stablecoin as a digital asset used or designed for payment or settlement whose issuer is obligated to convert, redeem, or repurchase it for a fixed monetary value while holding a stable value against that amount. Treasury explicitly solicited comment on how far the statute should reach cross-border activity — the open question with the largest consequences for offshore issuers. Comments are due October 19, 2026, and beginning January 18, 2027, the GENIUS Act’s expected effective date, no person may issue a payment stablecoin in the United States without an appropriate federal or state license.

The compliance net is backed by criminal exposure. Reporting on the proposal describes penalties reaching $1 million in fines and five years’ imprisonment per violation, and a narrow reserve definition — Treasury bills under 93 days, FDIC-insured deposits, and overnight repurchase agreements — which, per that same reporting, would require Tether to restructure roughly $47 billion in holdings. The penalty and reserve specifics and the Tether figure come from trade and secondary coverage rather than from the primary notice text checked here; they are recorded as reported and should be confirmed against the rule text before being cited as established.

The NPRM is the operative-detail stage of a statute this corpus has tracked from its conflict-of-interest objections forward: senators’ warnings about Trump-family crypto conflicts in the bill (2026-03-10–senators-stablecoin-genius-act-trump-crypto-conflicts), the AML and sanctions comment docket (2026-04-10–genius-act-aml-sanctions-comment-docket-open) and its close with World Liberty Financial verifiably absent from the framework (2026-06-09–genius-act-aml-comment-period-closes-wlf-verified-absent-july-18-framework-effective), the OCC’s stablecoin charters written to industry reserve standards (2026-06-24–genius-act-occ-stablecoin-charters-crypto-industry-reserve-standards), banks entering the market at the July 18 deadline (2026-07-12–genius-act-july18-deadline-banks-enter-stablecoin-market), and the Tether–Lutnick–Hines revolving door (2026-07-22–genius-act-tether-lutnick-hines-revolving-door-bloomberg). That last cross-link is the one to hold alongside the $47 billion restructuring figure: the reserve definition that would force Tether to restructure is being written inside an administration whose Commerce Secretary, Howard Lutnick, holds a roughly $600 million stake in Tether and previously worked to kill stablecoin legislation unfavorable to it (2025-01-20–howard-lutnick-600-million-tether-conflict).