Treasury's First GENIUS Act Rule Sets $10B Cutoff for Stablecoin Issuers

Treasury Fires Starting Gun on GENIUS Act With First Stablecoin Rule

The US Treasury Department released the first formal rulemaking under the GENIUS Act on 17 August, publishing an 87-page notice that begins to translate last year’s headline stablecoin law into enforceable regulation.

The proposal implements Section 3 of the Guiding and Establishing National Innovation for US Stablecoins Act, which prescribes who may issue, offer, or sell a payment stablecoin inside the United States once the statute takes effect on 18 January 2027.

Treasury Secretary Scott Bessent said the rule aims to “provide the regulatory certainty businesses need to innovate and grow in America,” according to the Treasury announcement. The public now has 60 days to file comments before Treasury moves toward a final version.

What the $10 Billion Threshold Actually Does

The most consequential number in the draft is $10 billion in outstanding circulation. Issuers below that mark can operate under a state licence, provided their home state’s regime meets federal standards. Issuers above it must transition to federal supervision under the Office of the Comptroller of the Currency.

The bifurcation gives smaller US-based issuers a lighter runway while pulling any breakout candidate into the federal net long before it reaches scale. Anyone watching the latest crypto news has seen the market chase this exact line for months, with issuers publicly weighing where they will apply.

What Counts as a Payment Stablecoin Anyway

A payment stablecoin, in the law’s language, is a digital token designed to hold a stable one-to-one value against a national currency and used or marketed for payments or settlement. Think of it as a digital dollar you can send between wallets, exchanges, and payment apps without waiting for a bank to settle.

That plumbing is why the definition matters. Once Treasury draws its boundary around what “issuing in the United States” means, every company that mints those tokens, holds their reserves, or plugs them into a payments product will need to sit on one side of the line or the other.

A Two-Track System With OCC at the Top

The rule sketches two parallel pathways for authorised issuance. Federal issuers answer to the OCC, the same regulator that supervises national banks. State issuers operate under the licence and examination regime of their home state, but only if that regime is judged “substantially similar” to the federal framework on reserve backing, anti-money-laundering compliance, and capital standards.

Treasury has asked commenters dozens of questions about how that similarity should be measured, signalling that the state-federal fit is where the industry fight is likely to concentrate. The OCC’s central role indicates a preference for placing large-scale stablecoin activity inside the traditional bank-supervisory perimeter, aligning payment tokens with the same examiners who oversee nationally chartered lenders.

The Foreign-Issuer Question: Tether, USDC and the 2028 Cutoff

Foreign-issued stablecoins, led by Tether’s USDT, receive careful treatment. Under the proposal, they cannot reach US customers through digital asset service providers unless the issuer complies with lawful US orders and any reciprocal arrangements Treasury negotiates with the issuer’s home country.

A hard deadline of 18 July 2028 caps that window: after that date, US service providers may not offer any payment stablecoin unless it comes from a licensed issuer. That gives exchanges, wallet apps, and payment processors roughly two years from the effective date to align their listings, or a self-imposed pressure to source dollar-token liquidity from GENIUS-compliant issuers instead.

How Enforcement Bites and When Rules Land

The GENIUS Act carries teeth. Issuing an unauthorised payment stablecoin inside the US can trigger substantial civil penalties per violation and criminal penalties that include prison time. Those consequences apply to the underlying law, not the current draft rule, but they set the enforcement backdrop against which Treasury’s definitions will be read.

The comment window closes in mid-October 2026, after which Treasury is expected to spend several months reviewing input before issuing a final rule ahead of the 18 January 2027 effective date, Coindesk reported. That leaves issuers roughly five months from the projected final rule to complete licensing filings, adjust reserve documentation, and prepare board and audit procedures to the OCC or state examiners’ satisfaction.

Will the 60-Day Window Reshape the Draft Rule

The industry response is likely to focus on three seams. First, the $10 billion threshold, which some issuers may argue is too low given the pace of growth in dollar-token supply. Second, the state-substantial-similarity test, where state regulators will push for flexibility and federal officials will push for consistency. State regulators have signalled they intend to file coordinated comments through the Conference of State Bank Supervisors, seeking room for their existing money-transmission frameworks.

Third, the foreign-issuer regime, where Tether’s willingness to comply with a US reciprocity arrangement will effectively decide whether the world’s largest stablecoin survives on regulated US exchanges. How much of the current draft survives 60 days of comment may indicate how firmly the OCC and Treasury intend to hold the line before January.

Regulation Catches Up With the Fastest-Growing Corner of Crypto

Stablecoins moved through 2025 and into 2026 as the segment most cited by traditional finance executives entering the digital asset space. That growth put the sector in front of legislators long before comparable rules landed on exchanges or DeFi, and the GENIUS Act was the response. The Treasury rule now translates statute into a working regime, one that treats a payment stablecoin as a distinct financial instrument rather than a security or a bank deposit.

For everyone else in the market, from a payments company building a digital wallet to a trader tracking crypto market prices, the effect is the same: the dollar-tokens that increasingly move value between platforms will soon have a named regulator, a licensing path, and a deadline.