US Treasury Proposes GENIUS Act Rules for Stablecoin Issuers

The U.S. Department of the Treasury advanced implementation of the GENIUS Act on Aug. 17. The department issued proposed rules governing payment stablecoin issuance, offers and sales in U.S. markets.

Treasury opened the proposal for public comment as regulators build the federal stablecoin framework. The move comes as stablecoin supply remains below its 2026 peak after years of strong growth.

GENIUS Act Rules Target U.S. Stablecoin Issuance

Section 3 of the GENIUS Act, which the Treasury Department is seeking public comment on, addresses the framework for stablecoins in the US. Beyond prescribing who can issue or offer stablecoins, it also includes restrictions on foreign stablecoin issuers.

The regulator is examining how to interpret these provisions of the law to ensure their effectiveness. The NPRM sets out how Treasury plans to implement the requirements for becoming a licensed stablecoin issuer in the US and poses 87 questions regarding the interpretation of the Section.

With the deadline for public comments set at 60 days, comments will remain open until at least mid-October. This will leave the Treasury with about three months to finalize the rules before the GENIUS Act becomes effective on January 18 2027.

Meanwhile, the Treasury has stated that it will treat stablecoins as a new arena separate from other financial instruments such as securities and commodities. While it acknowledged existing rules, it noted that these traditional investment rules may frustrate stablecoin goals.

The proposal stated that the core purpose of a stablecoin under the GENIUS Act is to serve as an effective means of payment and settlement, including across borders.

Stablecoin Market Cap Holds Near $310 Billion

The regulatory push comes as the stablecoin market has slowed after strong expansion during 2025.

DeFiLlama placed total stablecoin market capitalization around $308 billion to $310 billion in August. The figure remained below levels above $315 billion recorded earlier in 2026.

The market had expanded sharply during 2025. DeFiLlama reported that stablecoin supply rose from about $204 billion at the start of 2025 to roughly $305 billion by early December. Growth slowed during 2026.

DeFiLlama data showed the sector down roughly 1% over the latest 30-day period. Weekly supply also remained largely flat around the $310 billion level.

Tether remained the largest stablecoin issuer. USDT held roughly $184 billion in circulating market value, giving it close to 60% market dominance. Circle’s USDC ranked second at roughly $72 billion to $74 billion.

The latest contraction does not erase the sector’s earlier expansion. However, it shows that stablecoin supply has stopped growing at the pace recorded during 2025.

The GENIUS Act could now influence how issuers approach U.S. distribution, licensing and foreign-market access.

Treasury’s final Section 3 rules will determine how those statutory restrictions apply before the law’s expected Jan. 18, 2027 start.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Digital assets can experience sharp market movements.