NASCUS Summary: Treasury Proposed Rule Regarding the Issuance, Offering, and Sale of Payment Stablecoins in the U.S.
August 2026
On August 17, 2026, the U.S. Department of Treasury issued a Notice of Proposed Rule Making (NPRM) related to Treasury’s implementation of Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) Regulations on Payment Stablecoins Issuance, Offer, and Sale.
Under the GENIUS Act, Section 3 outlines the payment stablecoin market in the United States and defines who may issue, offer, sell, or otherwise make available payment stablecoins. Among other things, the proposal provides definitions for key terms not defined in the GENUIS Act such as “issue,” “issuer,” and “located in the United States.”
Comments are due to Treasury by October 19, 2026.
Summary
The proposal outlines the “fundamental architecture” for the payment stablecoin market in the United States including definitions and restrictions applicable to the issuance, offer, and sale of payment stablecoins.
As well, the proposal would restrict the issuance of payment stablecoins by unauthorized issuers, while separately restricting digital asset service providers (DASPs) from offering or selling certain payment stablecoins in the United States.
The proposal states that Section 3 is intended to have extraterritorial effect “if conduct involves the offer or sale of a payment stablecoin to a person located in the United States.”
Key Implementation dates include:
- January 18, 2027 – A person generally may not issue a payment stablecoin in the United States unless the person is a permitted payment stablecoin issuer (PPSI) or a qualifying foreign payment stablecoin issuer (FPSI) registered with the OCC.
- July 18, 2028 – A digital asset service provider (DASP) generally may not offer or sell a payment stablecoin to a person located in the United States, unless the payment stablecoin is issued by a PPSI or an FPSI that meets the requirements of the GENIUS Act.[1]
Definitions:
The proposal would establish or clarify several key definitions relevant to implementing Section 3, including:
- Digital Asset Service Provider (DASP) – A person (such as a digital asset exchange) that, for compensation or profit, engages in activities including exchanging or transferring digital assets, or participating in financial services related to digital asset issuance.
- Issue – Generally, the first transfer of a payment stablecoin by the issuer that provides another person the right to use, transfer, or have the payment stablecoin converted, redeemed, or repurchased.
- Issuer – A person obligated to convert, redeem, or repurchase the payment stablecoin for a fixed amount of value, and that represents, or creates a reasonable expectation that the stablecoin will maintain a stable value relative to that fixed amount of monetary value.
- Located in the United States – For an individual, it means the individual is physically present in the United States, except for a non-U.S. resident who is only in the United States temporarily. For an entity, it means the entity is organized or incorporated under U.S. or state law or has its principal place of business in the United States.
Restrictions on Issuance
Issuance of a payment stablecoin in the United States would generally be restricted to PPSIs or FPSIs that meet the applicable requirements of the GENIUS Act.
The proposal states that a person is considered to issue a payment stablecoin in the United States only if, at the time of issuance:
- The issuer is located in the United States; or
- The stablecoin is issued to a person located in the United States.
The proposal provides a safe harbor under which a foreign issuer would not be considered to have issued a payment stablecoin in the United States if it meets specified conditions:
- Is not located in the United States;
- Reasonably believes recipients are not located in the United States;
- Maintains policies, procedures, and controls reasonably designed to avoid issuance to persons located in the United States; and
- Does not engage in advertising or solicitation targeting persons located in the United States.
Note: Treasury has not yet established the process for determining if an FPSI resides in area that has proper regulatory protocols in place.
DASP Reliance, Exemptions, and Excluded Transactions
DASPs offering foreign-issued payment stablecoins may rely on a foreign issuer’s compliance representation, subject to reasonable due diligence.
The proposal would codify statutory exemptions for:
- Direct transfers between individuals – Transfers of digital assets between two individuals acting on their own behalf and for lawful purposes, without an intermediary.
- Transfers between U.S. and foreign accounts – Receipt of digital assets between an individual’s U.S. and foreign accounts when the accounts are offered by the same parent company.
- Self-custody wallets – Transactions through software or hardware wallets that facilitate an individual’s custody of their own digital assets.
Violations
Section 3 of the GENIUS Act is intended to have extraterritorial effect, and knowing participation in a violation is punishable by a fine up to $1 million for each violation, imprisonment for up to five years, or both.
Questions
Treasury is seeking public comment on 87 specific questions addressing various aspects of the proposal’s framework, including implementation, regulatory scope, foreign issuer treatment, exemptions, and compliance considerations.
Note: Although Treasury did not, overall, incorporate a securities-based framework (Reg S) into the proposal, it is seeking comment on whether aspects of such a framework should be considered. This approach was suggested by commenters in the Advance Notice of Proposed Rulemaking, but was not adopted as part of the proposed framework.