Public comments on the U.S. Treasury Department’s proposed rule implementing section 3 of the GENIUS Act are due on or before October 19, 2026, according to the Federal Register notice. The proposal, filed under docket TREAS-DO-2026-0496, would define what it means to issue a payment stablecoin “in the United States” and what it means to offer or sell one to a person located there.
The close of the comment period does not make the rule final. Treasury still has to review the comments and decide what to adopt, and the Act’s own effective date is a separate matter covered below.
The Deadline and How to Comment
Treasury published the notice of proposed rulemaking on August 18, 2026, at 91 FR 53368. Comments may be submitted through regulations.gov or by mail, and all comments received “will be part of the public record and subject to public disclosure.” Treasury’s August 17 press release asked for comments “within 60 days of publication in the Federal Register.” The notice itself sets the date at October 19.
The notice also mentions a November 4 date, which belongs to the earlier stage of this rulemaking. A footnote says comments on the 2025 advance notice “were originally due on October 20, 2025, but Treasury later extended the comment period by 15 days to November 4, 2025.” It does not apply to the current proposal.
What Section 3 of the Act Says
Section 3 of the GENIUS Act, codified at 12 U.S.C. 5902, sets who may issue and who may sell payment stablecoins in the United States. Three provisions matter most here.
- Section 3(a) says it “shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States.”
- Section 3(b)(1) says that beginning three years after July 18, 2025, it is unlawful for a digital asset service provider “to offer or sell a payment stablecoin to a person in the United States, unless the payment stablecoin is issued by a permitted payment stablecoin issuer.”
- Section 3(b)(2) says it is unlawful for a digital asset service provider “to offer, sell, or otherwise make available in the United States a payment stablecoin issued by a foreign payment stablecoin issuer” unless that issuer can and will comply with lawful orders and any reciprocal arrangement.
Section 3(e) adds that the section “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.”
Two Different Start Dates
The Federal Register notice says the Act’s effective date “is expected to be January 18, 2027,” which is 18 months after enactment. Under section 20 of the Act, as reproduced in the U.S. Code notes, the section takes effect on the earlier of 18 months after July 18, 2025, or 120 days after the primary Federal payment stablecoin regulators issue any final regulations. Treasury’s press release calls January 18, 2027 “the expected effective date of the GENIUS Act.”
Section 3(b)(2), the foreign-issuer provision, applies from that effective date. The broader section 3(b)(1) bar, which limits service providers to selling stablecoins from permitted issuers, begins separately on July 18, 2028. The notice describes these as two distinct prohibitions. Neither the notice nor the press release gives a date for a final rule, and Treasury calls the January date expected.
What the Proposed Rule Would Define
The proposal would add a new part 1523 to title 12 of the Code of Federal Regulations. Four definitions do most of the work.
- “Issue” would mean “the first transfer of a payment stablecoin by the issuer,” directly or indirectly, including by crediting an account, that gives someone other than the issuer the right to use, transfer or redeem it. A coin minted but held in the issuer’s own treasury would not count as issued, Treasury says.
- An “issuer” would be a person who is obligated to convert, redeem or repurchase the coin for a fixed amount of monetary value and who represents that it will maintain a stable value.
- An individual would be “located in the United States” if physically present there, unless the person is not a U.S. resident and the presence is merely temporary. An entity would be located there if it is organized under U.S. or state law or has its principal place of business in the United States.
- “Offer” would include making available a payment stablecoin that has not yet been issued, which covers presales.
Under proposed section 1523.2, a person issues a stablecoin in the United States only if, at the time of issuance, the person is located there or issues the coin to someone located there. A foreign issuer would be deemed not to issue in the United States if it meets four conditions. It must be outside the United States, reasonably believe each recipient is too, maintain controls reasonably designed to avoid issuing to people located there, and avoid advertising that targets them. Treasury also reads the Act to allow a foreign issuer that meets the criteria in section 18(a), including registration with the Office of the Comptroller of the Currency, to issue in the United States.
Offers and Sales by Service Providers
Proposed section 1523.3 covers digital asset service providers such as exchanges. Paragraphs (a) and (b) restate sections 3(b)(1) and 3(b)(2). Paragraph (c) says a provider may rely on a foreign issuer’s representation that it can and will comply with lawful orders and reciprocal arrangements, but only after reasonable due diligence, and the provider cannot rely on it if it knows or should know the representation is false. Treasury expects that diligence to include confirming that no prohibition on secondary trading under section 8 of the Act is in effect for that issuer.
Paragraph (d) lists examples of conduct that counts as offering or selling to a person located in the United States, and Treasury says the list is not exhaustive.
- Directly soliciting a person located in the United States to buy.
- Advertising the coin as available to persons located in the United States.
- Answering an unsolicited inquiry from such a person by indicating willingness to sell.
- Advising buyers how to evade location detection tools such as IP address checkers.
- Entering into a contract of sale with such a person.
Paragraph (e) describes when a provider is deemed not to have offered or sold to a person located in the United States. It requires a reasonable belief that the buyer is not located there, policies and controls reasonably designed to avoid U.S. sales, and no advertising or solicitation that targets U.S. persons. The proposal names no specific coin. Its tests apply to any payment stablecoin.
What Treasury Is Asking Commenters
The notice poses numbered questions, the last of them Question 87. They cover whether the definition of “issue” is clear, how bridges and wrapped tokens should be treated, and whether “located in the United States” is too broad or too narrow. Treasury also describes two alternatives it is considering. One would deem any issuance to a person located in the United States unlawful regardless of the issuer’s diligence. The other would adopt an offshore-transaction framework closer to Regulation S under the Securities Act.
Treasury Secretary Scott Bessent said in the press release, “Treasury welcomes input from stakeholders as we work to provide the regulatory certainty businesses need to innovate and grow in America.”
Jamoraquai Take
The proposal sets how to count an issuance, how to locate a buyer, and what a platform must do to show it did not sell to someone in the United States. The foreign-issuer rule in section 3(b)(2) and the broader bar in section 3(b)(1) have separate start dates, and the final rule may change how Treasury words them.
After the deadline, the things to follow are whether Treasury keeps the “first transfer” definition of issue, how it settles the two alternatives it described, and how much due diligence it expects from platforms before relying on a foreign issuer’s word. This post is news coverage and is not legal, trade or investment advice.
Sources
- Department of the Treasury, “GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale,” 91 FR 53368 (August 18, 2026), docket TREAS-DO-2026-0496
- U.S. Department of the Treasury, “Treasury Seeks Public Comment on GENIUS Act Proposed Rulemaking” (August 17, 2026)
- 12 U.S.C. 5902, Issuance and treatment of payment stablecoins, with the section 20 effective-date note (Legal Information Institute)
