TL;DR:
- The U.S. Treasury Department submitted a proposal to implement the GENIUS Act, establishing key definitions.
- The industry and the public have 60 days to submit comments, and the law’s effective deadline is set for January 18, though it is unlikely all rules will be ready by then.
- The proposal also focuses on foreign stablecoin issuers such as Tether. The GENIUS Act could be partially rewritten by the Digital Asset Market Clarity Act.
The U.S. Department of the Treasury is working on the implementation of the GENIUS Act. It has just published a proposal that establishes federal definitions of what it means to issue stablecoins on U.S. territory and who is required to comply with its provisions. This initiative is the first significant action since Congress completed the law last year.
Treasury Secretary Scott Bessent noted that the administration seeks to move quickly to “provide the regulatory certainty that businesses need to innovate and grow in America, consolidate the role of the U.S. dollar as the world’s reserve currency, and keep the United States as the crypto capital of the world.”
Stablecoins: the Problem of Foreign Issuers
The proposal addresses one of the most sensitive points of the law: the treatment of international issuers, such as Tether, the largest company in the global stablecoin market. The document raises dozens of questions about the best way to interpret the regulation, each of which must be resolved before a final rule can be issued. The deadline for receiving comments expires in mid-October.
The Treasury clarified that, while it studied traditional securities legal frameworks as a reference point, it believes that applying those investment rules to payment stablecoins could undermine the purpose of the law, which is to ensure their effective use as a means of payment and settlement, including across borders.
The Timeline Keeps Falling Behind
The one-year deadline the law established for implementing its rules expired last month without the administration managing to meet it. The next milestone is the effective date, set for January 18, although analysts estimate that it is unlikely that all regulations will be finalized by then.
At the same time, the Digital Asset Market Clarity Act —which could rewrite parts of the GENIUS Act, particularly those relating to stablecoin yield programs for customers on exchanges— is facing serious difficulties in the Senate after failing to advance in key votes before the August recess.
