Treasury Proposes Limitations on Payment Stablecoin Issuance and Sales

The U.S. Treasury Department proposed a new regulatory part, 12 CFR Part 1523, to implement Section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act ("GENIUS Act"), limiting who may issue, offer, or sell payment stablecoins to persons in the United States.

The proposal would apply to conduct abroad when a payment stablecoin is offered or sold to a person located in the United States. It would cover issuers, digital asset service providers, and foreign payment stablecoin issuers.

Proposed Rule 1523.2 ("Payment Stablecoin Issuance") would make it unlawful for a person to issue a payment stablecoin in the United States unless the person is a permitted issuer or a foreign issuer meeting the criteria in Section 18(a) of the act. For foreign issuers, the criteria include supervision under a comparable foreign regime and registration with the OCC. The rule identifies activities that count as unlawful participation in a violation, such as acting as a market maker for newly issued stablecoins or coordinating with an issuer on minting.

Proposed Rule 1523.3 ("Payment Stablecoin Offer and Sale") would bar digital asset service providers, starting July 18, 2028, from offering or selling a payment stablecoin to a person located in the United States unless it originates from a permitted or qualifying foreign issuer. Providers relying on a foreign issuer's compliance representation must first perform reasonable due diligence and cannot rely on it if they know or should know it is false.

Proposed Rule 1523.4 ("Exemptions and Safe Harbors") would exempt (i) subsidiaries of insured depository institutions and pending federal qualified applicants but only if the primary federal stablecoin regulator grants a Section 5(f) waiver; (ii) transactions during Treasury-determined exigent circumstances; (iii) direct peer-to-peer transfers between individuals; and (iv) self-custody wallet transactions.

Most key terms are defined by cross-reference to the GENIUS Act. Treasury wrote its own definitions for three terms the act leaves undefined: "located in the United States," "issue," and "issuer." An accompanying appendix offers interpretive examples covering airdrops to people physically present in the United States, exchange listings coordinated with issuers, and delayed-redemption digital assets.

Comments are due by October 19, 2026.