US Crypto Regulation Advances as Treasury Proposes New GENIUS Act Rules

Key Insights:

• Crypto regulation advances as Treasury proposes new GENIUS Act definitions.
• U.S. licensing rules are expected to take effect on Jan. 18, 2027.
• The proposal also addresses stablecoin sales to U.S. customers.

The latest crypto regulation news highlights a major move by the U.S. Treasury, which has proposed new GENIUS Act rules defining when stablecoin activity requires federal or state licensing. The Aug. 17 proposal adds another step to ongoing efforts to regulate crypto under the federal stablecoin framework.

Treasury also seeks clearer standards covering stablecoins issued, offered, or sold to people within the United States.

Crypto Regulation Focuses on Stablecoin Licensing

Beginning Jan. 18, 2027, companies generally cannot issue payment stablecoins domestically without an appropriate federal or state license. Treasury identifies that date as the expected effective date of the GENIUS Act.

Therefore, the proposed rule defines when an issuer operates within the United States. That distinction determines when companies must obtain authorization under the GENIUS Act.

Meanwhile, the Treasury also addresses the distribution of stablecoins by digital asset service providers. The agency proposes definitions covering offers and sales made to people within the United States.

Foreign-issued stablecoins face separate requirements under the framework. Providers generally cannot distribute them unless foreign issuers can comply with lawful U.S. orders and reciprocal arrangements.

Additionally, broader restrictions take effect on July 18, 2028. Digital asset providers generally cannot sell stablecoins to U.S. persons unless licensed companies issue those assets.

Treasury Secretary Scott Bessent said the department is implementing the framework established by President Donald Trump and Congress. Bessent reiterated on X that Treasury wants stakeholder feedback while providing greater regulatory certainty for businesses.

He also connected the framework to domestic innovation and to the U.S. dollar’s role as a global reserve currency.

Stablecoin News Builds on Earlier GENIUS Act Work

The latest stablecoin news follows several earlier rulemaking efforts tied to the GENIUS Act. Treasury had issued an Advance Notice of Proposed Rulemaking on September 18, 2025, covering broader implementation questions.

The new proposal specifically focuses on Section 3 requirements. Treasury will accept public comments for 60 days following publication in the Federal Register.

Notably, those submissions will remain publicly viewable. Treasury said feedback could help shape the final implementation framework.

Meanwhile, the Office of the Comptroller of the Currency proposed its own GENIUS Act framework in February. That proposal addressed reserves, redemptions, capital, liquidity, custody, supervision, risk management, applications, and wind-down procedures.

CLARITY Act Stalemate Creates New Crypto Regulation Hurdle

Elsewhere, another major crypto regulation proposal faces delays in Congress. The Banker reported that senators entered summer recess without voting on the CLARITY Act.

Capitol Hill insiders told The Banker that passage before 2027 now appears unlikely. Senators return in September, while the November midterm elections could slow legislative activity.

Meanwhile, Polymarket users assigned a 19% probability to a 2026 signing. That figure fell from 82% in February.

Notably, Bitwise Chief Investment Officer Matt Hougan told CNBC that the crypto industry wants the CLARITY Act to advance. His comments came before Trump’s planned White House meeting with crypto executives.

However, Senator Thom Tillis has pushed for additional negotiations. Yellow reported that Tillis wants Senate Banking Committee Chair Tim Scott to delay further action.

Punchbowl News reported that Tillis does not expect an April markup and prefers consideration in May. He wants negotiations to continue over unresolved stablecoin yield provisions involving banks and crypto companies.

Tillis and Senator Angela Alsobrooks have worked on a compromise covering stablecoin rewards. Their draft prohibits passive rewards on idle balances while allowing incentives linked to user activity.