The U.S. Department of the Treasury has taken its biggest step yet toward implementing the GENIUS Act, proposing federal definitions of what it means to issue U.S. stablecoins and which entities must comply with the law that Congress completed last year.
The proposal, published Monday, marks the first major rulemaking to emerge under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act — and it arrives after the law's one-year implementation deadline quietly expired last month.
What the Proposal Covers
Treasury said it approached stablecoins as a new asset arena rather than forcing them into existing frameworks, though it studied securities laws as a reference point for how other financial instruments handle issuance and sale, including offshore activity.
Notably, the department pushed back on applying traditional investment rules wholesale. "Treasury believes that 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," the proposal states.
Treasury Secretary Scott Bessent said the administration is moving quickly to provide "the regulatory certainty businesses need to innovate and grow in America, cement the role of the U.S. dollar as the world's reserve currency, and keep America the crypto capital of the world."
Timeline and Open Questions
Monday's action follows an advance notice of proposed rulemaking that Treasury issued in September 2025 on what was meant to be a tight timeline. The industry now has 60 days — until mid-October — to submit comments, after which the department is expected to spend further months reviewing responses before finalizing the rule.
The proposal poses dozens of questions about how to interpret the law, each requiring an answer before final sign-off. Stakeholders will pay particular attention to how Treasury treats foreign issuers, a category that includes market leader Tether.
The next statutory milestone is the law's effective date of January 18, 2027. Full implementation by that date is considered unlikely, and financial regulations typically include transition runways for affected industries.
Why It Matters
The GENIUS Act was hailed as the first major federal crypto legislation when signed into law. Monday's proposal signals that federal regulators — Treasury alongside banking and markets regulators — are making steady, if delayed, progress toward putting the U.S. stablecoin industry on a defined legal footing.