Treasury Proposes Federal Rules for Stablecoin Issuers

The US Treasury Department has released a Notice of Proposed Rulemaking to establish a comprehensive federal structure for payment stablecoins, marking the next critical phase in implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.

The proposal, currently open for a 60-day public comment period, sets a definitive timeline for strict licensing enforcement. Starting January 18, 2027, companies will be legally prohibited from issuing payment stablecoins within the United States without securing an appropriate state or federal license.

The rules also extend regulatory authority directly to digital asset service providers. By July 18, 2028, cryptocurrency exchanges, brokerages, and wallet operators will be barred from offering or selling non-licensed stablecoins to American users. According to reporting from American Banker, this approach casts a broad compliance net that could hold secondary intermediaries liable for unlawful issuance. The publication noted that the framework will mandate platforms to conduct "reasonable due diligence" when handling foreign-issued tokens and managing overseas activity involving domestic customers.

Treasury Secretary Scott Bessent highlighted the administration's aggressive timeline for the rollout. "President Trump and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework," Bessent said in an official statement. He added that the agency's overarching goal is to "cement the role of the U.S. dollar as the world's reserve currency, and keep America the crypto capital of the world".

Shifting Corporate and Banking Dynamics

The impending guidelines mandate robust reserve standards to prevent systemic failures similar to previous cryptocurrency collapses. Stablecoin issuers will be required to back their circulating tokens on a strict 1:1 basis, utilizing only highly liquid assets such as Treasury bills maturing in 93 days or less. To further mitigate counterparty risks, exposure to any single asset custodian cannot exceed 40% of an issuer's total reserves, according to an analysis published by the corporate treasury management firm Kyriba.

The move aims to unblock institutional participation. Kyriba reported that 73% of corporate executives had previously identified regulatory uncertainty as their foremost concern preventing broader digital asset adoption.

Despite the momentum toward standardized compliance, traditional financial institutions are pressing regulators for tighter operational definitions to prevent market overlap. America's Credit Unions, a prominent industry trade group, expressed caution regarding how the GENIUS Act classifies specific digital instruments. The organization warned that significant questions remain regarding whether digital assets redeemable exclusively in credit union shares will be inadvertently governed as payment stablecoins. The trade association is actively urging federal authorities to explicitly refine the definition of traditional deposits to avoid encumbering credit unions with unnecessary crypto compliance burdens.

The Treasury is simultaneously seeking industry feedback on potential offshore safe harbors and an emergency mechanism that would allow the temporary suspension of these restrictions under unusual market conditions.