US Treasury Proposes GENIUS Act Rules Defining Payment Stablecoin Issuance Jurisdiction
Key points
- The US Treasury's NPRM covers only Section 3 of the GENIUS Act, which governs payment stablecoin issuance, offer, and sale, with a 60-day comment period.
- A payment stablecoin is 'covered' if issued in the US or issued to a person physically located in the US at the time of issuance, including airdrops to US residents present in the country.
- US residents temporarily abroad and non-US residents temporarily in the States are both excluded from the jurisdictional trigger.
- The requirement to use only regulated payment stablecoins, and the foreign stablecoin issuance rule, take effect on 18 January 2027, the Act's expected effective date.
- Crypto exchanges have an additional 18 months beyond January 2027 before offering or selling a non-permitted payment stablecoin to a US person becomes unlawful, though foreign-issued stablecoins face the earlier cutoff.
The US Treasury has published a notice of proposed rulemaking (NPRM) under the GENIUS Act, opening a 60-day comment window. This is the third Treasury proposal tied to the Act, following earlier drafts on illicit finance and on equivalence treatment for state-regulated stablecoins. The current NPRM addresses only Section 3, which governs the issuance, offer, and sale of payment stablecoins.
The draft establishes a two-limb jurisdictional test: a stablecoin is covered if it is issued in the United States or issued to a person located there. Residency alone is not determinative at the moment of issuance; a US resident temporarily abroad falls outside scope, while a non-US resident physically in the States at the time of issuance is equally excluded. Airdrops delivered to a US resident who is physically present in the country, however, do fall within the rules.
Timelines carry real operational weight. The obligation to use only regulated payment stablecoins, and the parallel rule governing which foreign stablecoins may be issued or sold into the US, both commence on 18 January 2027, the Act’s expected effective date. Crypto exchanges receive a longer runway: it becomes unlawful for them to offer or sell a non-permitted payment stablecoin to a US person only 18 months after that date. Foreign-issued stablecoins, however, face the earlier January 2027 cutoff rather than the extended exchange timeline.