Treasury closed the public comment period on its proposed payment-stablecoin rule on October 19. The document that will govern who may issue, offer, and sell dollar-pegged stablecoins in the United States does not exist yet. Issuers now sit 91 days from January 18, 2027, the date the GENIUS Act’s foreign-issuer prohibition takes effect.
The proposal, docket TREAS-DO-2026-0496 and RIN 1505-AC95, would add Part 1523 to title 12 of the Code of Federal Regulations. It implements Section 3 of the GENIUS Act, enacted July 18, 2025, and splits the work across five sections: definitions and scope, the issuance prohibition, the offer-and-sale restrictions on digital asset service providers, the exemptions and safe harbors, and severability. A payment stablecoin is a digital asset used as a means of payment or settlement whose issuer must convert, redeem, or repurchase it for a fixed amount of monetary value. That definition deliberately excludes investment tokens.
A penalty that compounds
Section 3(a) makes it unlawful for anyone other than a permitted issuer to issue a payment stablecoin in the United States. Knowing participation in a violation carries a fine of up to $1 million for each violation, up to five years in prison, or both. The phrase “for each violation” is the part that matters: a series of unlawful issuances does not cap at a single fine.
The rule also reaches across borders. Section 3 is written to apply extraterritorially when conduct involves an offer or sale to a person located in the United States. A foreign issuer that sells into the U.S. market sits inside the rule’s reach, even when the issuer itself operates from abroad.
Two clocks, not one
The distribution rules run on two dates. July 18, 2028, three years after enactment, is the last day exchanges and custodians can list stablecoins issued by anyone other than a permitted issuer. The earlier date, January 18, 2027, is when the foreign-issuer prohibition bites. A foreign issuer can stay in the U.S. market only by registering with the OCC under a comparable foreign supervisory regime and by showing it can comply with lawful orders.
That leaves a gap. Treasury must read and answer the comments, draft the final rule, and clear it through the rulemaking process. It has not set a finalization date, so issuers are preparing to comply with a statute whose binding operational text is not yet written. The comment window did not change that direction of travel.
Where the relief sits
The proposal carries three escape hatches. Section 5(f) lets the primary federal regulators waive requirements for up to twelve months for subsidiaries of insured depository institutions and for federal qualified issuers with a pending application. Proposed section 1523.4 adds safe harbors for de minimis transaction volume and for unusual or exigent circumstances. Section 3(h) excludes three transactions outright: direct transfers between two individuals, transfers between a person’s own U.S. and foreign accounts at the same parent, and self-custody wallet activity.
What to watch next
Three numbers now dominate. The 91-day countdown to January 18, 2027 is the deadline every issuer needs a license or a waiver to beat. The twelve-month Section 5(f) window is the maximum cushion a qualifying issuer can request, and it still requires a pending application. The July 18, 2028 date is the final deadline for platforms to list only permitted-issuer stablecoins.
The next signals are concrete: a final Treasury rule and the OCC’s final issuer-licensing rule. Neither has replaced the proposed Part 1523 with final text. Until one lands, the 91-day number is the figure issuers should be watching.
Source: BlockchainReporter.