The US Treasury has released draft rules defining who must obtain federal licenses to issue stablecoins, but the regulatory framework remains incomplete just five months before the GENIUS Act takes effect on January 18, 2027. On August 17, 2026, the Treasury Department published a Notice of Proposed Rulemaking (NPRM) that opens a 60-day public consultation period, with responses due by mid-October 2026. However, the law was originally supposed to have finalized rules by July 2025, a deadline that has already passed without complete guidance.

What Are the Key Definitions in the New Treasury Draft?

The Treasury's draft text addresses two previously vague concepts that will determine which stablecoin issuers need federal licenses and which can operate under state authorization. These definitions are not merely technical details; they shape the entire regulatory landscape for digital payment tokens. The Treasury has deliberately excluded certain reflexes stemming from traditional securities law, considering stablecoins as means of payment rather than investment instruments.

• "Issuing" a Stablecoin: The draft clarifies what it means to issue a stablecoin within the United States, establishing which entities must hold federal licenses versus state authorization.
• "Offering or Selling" to US Residents: The text defines the conditions under which stablecoins can be distributed to people living on US soil, a critical distinction for foreign issuers like Tether.
• Foreign Issuer Treatment: The Treasury must specify under what conditions foreign stablecoin issuers can continue operating in the US market without a local license, provided certain reciprocal commitments between jurisdictions are respected.

"These new rules must provide companies with the regulatory certainty necessary to innovate, strengthen the dollar's role as the world's reserve currency, and make the United States the global cryptocurrency capital," stated Treasury Secretary Scott Bessent.

Scott Bessent, Treasury Secretary

Why Is the Timeline So Tight and Uncertain?

The regulatory schedule is already showing signs of strain. The law originally required regulators to finalize their rules within 120 days after the Senate voted on the text in July 2025. That deadline expired in July 2026 without any definitive rules being published. Now, the GENIUS Act could come into force in January 2027 without a complete user guide, a rare situation for financial regulation of such magnitude.

The institutional fragmentation across US financial regulators compounds the delays. The Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve each published their own draft rules in 2026, but without perfect coordination among the agencies. Each regulator advances on its own schedule with its own priorities. Additionally, the Digital Asset Market Clarity Act, which is supposed to rewrite certain provisions of the GENIUS Act, remains stuck in the Senate. Key votes could not begin before the August summer recess, casting doubt on the final coordination between the two texts.

How to Understand the Stablecoin Regulatory Timeline?

• January 18, 2027: The GENIUS Act takes effect, requiring any entity wishing to issue a stablecoin in the United States to hold either a federal or state license.
• July 18, 2028: Digital asset service providers will no longer be able to offer any stablecoin to US residents if it is not issued by a licensed issuer, creating an 18-month transition window.
• Mid-October 2026: The public comment period on the Treasury's draft rules closes, after which the Treasury must review responses before drafting a final version, a process that typically takes several additional months.

Which Stablecoins Face the Most Regulatory Risk?

The market does not pause while Washington legislates. According to data aggregated by DefiLlama, the cumulative stablecoin capitalization stands at $308.0 billion, representing a 14.3% increase year-on-year, with a historic peak of $322.4 billion on May 17, 2026. Tether (USDT) maintains a dominant position with nearly $183 billion in capitalization, about 59% of the market, far ahead of USDC issued by Circle.

The industry's attention is precisely focused on the treatment of foreign issuers. Tether, based outside the United States, is a textbook case. A regulatory misstep in how the Treasury specifies foreign issuer access could weaken the world's largest stablecoin's access to the US market, with cascading repercussions on the liquidity of the entire crypto ecosystem. The onchain transfer volumes illustrate the stakes. According to CryptoRank Research, USDC transfers reached about $3,600 billion in July 2026, compared to $1,400 billion for USDT. These data show two very distinct usage logics: institutional payment for USDC and trading liquidity for USDT, both of which the future Treasury rule will need to address with equal rigor.

Five months before the deadline, the stablecoin law is moving forward without a definitive safety net. Between scattered agencies, a stuck Congress, and a market already at $310 billion, the future depends on a simple factor: the speed at which Washington turns ambition into applicable rules. The regulatory uncertainty creates challenges for both established players and new entrants seeking to build compliant stablecoin infrastructure in the United States.