GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale.
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Treasury has issued a notice of proposed rulemaking implementing section 3 of the GENIUS Act — the provisions governing who may issue, offer, or sell payment stablecoins in the United States. The proposal would add a new part 1523 to title 12 of the CFR.
This episode is a condensed audio version of the proposal. What we cover:
- Who may issue: only permitted payment stablecoin issuers, plus foreign issuers meeting the section 18(a) criteria. Knowing participation in an unlawful issuance carries a fine up to $1 million per violation and up to five years imprisonment.
- Treasury's proposed definitions of "issue," "issuer," and "located in the United States" — terms the statute left undefined.
- Why Treasury concluded a stablecoin issuer can simultaneously be a digital asset service provider.
- The two "deemed not to" safe harbors: what a foreign issuer or a digital asset service provider must do — reasonable belief, implemented policies and controls, no U.S.-targeted advertising — to stay outside the prohibitions.
- Due diligence a digital asset service provider must perform before relying on a foreign issuer's representation about lawful-order compliance.
- Exemptions, safe harbors, severability, and Treasury's four proposed interpretations.
- The two alternatives Treasury is weighing, including a Regulation S-style offshore transaction framework.
Note for credit unions: Question 5 asks whether a digital asset redeemable only in credit union shares should be treated as a payment stablecoin. Worth watching.
Comments are due October 19, 2026, at regulations.gov.
If your credit union would like help preparing for an NCUA exam, visit MarkTreichel.com.
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