The U.S. Department of the Treasury has issued a notice of proposed rulemaking aimed at implementing Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which established a comprehensive federal framework for regulating payment stablecoins. The proposal was published in the Federal Register on August 18, 2026, and public comments are due by October 19, 2026.
Treasury Is Implementing the GENIUS Act
According to the official Treasury announcement, the GENIUS Act was enacted on July 18, 2025, and defines a payment stablecoin as a digital asset designed to be used as a means of payment or settlement, where the issuer is obligated to convert, redeem, or repurchase it for a fixed amount of monetary value and represents that it will maintain a stable value. National currencies, federally insured bank deposits, and securities under federal securities laws are explicitly excluded from that definition.
For consumers, stablecoins are digital assets designed to maintain a relatively stable value—often by being tied to the U.S. dollar—rather than fluctuating as dramatically as cryptocurrencies such as Bitcoin. The proposed regulations focus on who is legally permitted to issue, offer, sell, or otherwise make available payment stablecoins in the United States. Under the GENIUS Act, it is unlawful for any person other than a “permitted payment stablecoin issuer” to issue a payment stablecoin in the U.S. Treasury’s proposal seeks to clarify and implement those statutory prohibitions and limitations.
A permitted payment stablecoin issuer, as defined in the Act, must be a U.S.-formed entity that qualifies as one of three types: a subsidiary of an insured depository institution approved under the Act, a federally qualified payment stablecoin issuer, or a state qualified payment stablecoin issuer. Entities or individuals that knowingly participate in a violation of the issuance prohibition face significant penalties under the Act, including fines of up to $1 million per violation, imprisonment of up to five years, or both.
Treasury also noted that the law is intended to have extraterritorial reach, applying to the offer or sale of payment stablecoins to any person located in the United States, regardless of where the issuer is based.
What the Proposed Stablecoin Rules Could Mean for Consumers
The proposed rules affect a broad range of market participants, including fintech companies, banks exploring digital asset products, and anyone involved in the creation or distribution of stablecoins that could be used for payments. The rulemaking is particularly relevant to consumers who hold or transact in stablecoins, as it would determine which issuers are operating legally under federal law.
Comments may be submitted electronically at regulations.gov or by mail to the U.S. Department of the Treasury, Office of General Counsel, 1500 Pennsylvania Avenue NW, Washington, DC 20220. Readers with specific questions about how these proposed rules may apply to their situation should consult the Treasury’s official guidance or a qualified legal or financial professional.
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Amanda Blankenship is the Chief Editor for District Media. With a BA in journalism from Wingate University, she frequently writes for a handful of websites and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, son, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.
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