GENIUS Act stablecoin comments close with 91 days to go

The U.S. Treasury closed public comments on its proposed payment-stablecoin rule Oct. 19. The GENIUS Act will take effect 91 days later, on Jan. 18, 2027.

Treasury has not published a final rule. It must review and address the comments before completing, clearing and publishing the final text. The proposal does not set a date for that process.

The proposal would add Part 1523 to Title 12 of the Code of Federal Regulations. It would restrict who may issue, offer or sell payment stablecoins in the United States. The rules would also cover foreign issuers that sell the assets to people in the country.

The GENIUS Act defines a payment stablecoin as a digital asset designed for payment or settlement whose issuer must convert, redeem or repurchase it for a fixed amount of monetary value. The definition excludes securities and commodities covered by the law.

The law prohibits anyone other than a permitted payment-stablecoin issuer from issuing a payment stablecoin in the United States. Knowing participation in a violation can result in a fine of up to $1 million for each violation, imprisonment for up to five years, or both.

The law sets a separate deadline for digital-asset service providers. Starting July 18, 2028, they will be prohibited from offering or selling a payment stablecoin to a person in the United States unless the asset was issued by a permitted issuer.

A shorter deadline applies to foreign-issued payment stablecoins. From Jan. 18, 2027, a foreign issuer seeking to continue serving U.S. customers must show that it can comply with lawful orders, meet reciprocal requirements and register with the Office of the Comptroller of the Currency under a comparable foreign supervisory regime.

The proposed rule includes exemptions and safe harbors for de minimis transaction volumes and unusual or exigent circumstances. The Act also allows primary federal regulators to waive certain requirements for up to 12 months for subsidiaries of insured depository institutions and qualified issuers with pending applications on the effective date.

The Act excludes direct person-to-person transfers without an intermediary, transfers between a person’s own U.S. and foreign accounts at the same parent company, and activity involving self-custody wallets.

Treasury’s proposal is part of a broader regulatory process that includes the OCC’s issuer-licensing rule and separate anti-money-laundering, sanctions and crypto-asset regulations. The OCC’s final licensing framework will affect registration and comparability reviews for foreign issuers.

The Securities and Exchange Commission’s comment period for its crypto-assets proposal is scheduled to close Oct. 20. The Financial Accounting Standards Board’s proposal on whether stablecoins can qualify as cash equivalents is scheduled to close Nov. 19.