15 Oct
2026
For most of the past year, the GENIUS Act was a headline. Over the last few weeks it has started turning into an operating manual. On September 24, the Federal Reserve Board asked for public comment on two proposals that would set reserve, capital and application rules for the stablecoin issuers it supervises. Days from now, on October 19, the comment window closes on Treasury's proposal defining who is actually "issuing" a payment stablecoin in the United States. Put the two together and you can see the shape of the system regulators are building.
This matters well beyond crypto trading desks. Stablecoins are being pitched as a settlement layer for everyday payments, cross-border transfers and merchant payouts. The rules now being drafted will decide which tokens are allowed to circulate, what has to sit behind them, and who gets the blame when something breaks.
The Board's package has two parts. The first, according to the Fed's announcement, would require Board-supervised issuers to fully back their stablecoins with permissible reserve assets such as short-term Treasury bills and certain other high-quality, liquid assets. It would add standardized capital requirements for certain credit and operational risks, risk-management standards, rules for firms that safekeep the assets backing a stablecoin, and clarity on which stablecoin activities Board-supervised banks may conduct.
The second proposal creates a tailored application process for Board-supervised banks that want to issue payment stablecoins, requiring a business plan and financial information, plus a process for appeals, hearings and final decisions. PYMNTS reported that the Board approved publication of both proposals unanimously.
The Federal Register notice published September 29 adds two details worth flagging. Comments must be received by November 30, 2026. And alongside the rules for Fed-supervised issuers, the Board is proposing to implement the GENIUS Act's prohibition on tying in section 4(a)(8), a provision the notice says applies to all permitted payment stablecoin issuers, not only those the Fed supervises.
Treasury's proposal tackles a more basic problem. Treasury announced the notice of proposed rulemaking on August 17 to implement section 3 of the Act, which governs who may issue a payment stablecoin and when one can be offered or sold in the U.S. Secretary Scott Bessent described the law as "establishing a landmark framework and clear rules of the road for payment stablecoins."
The key definitions, as summarized in a Sheppard Mullin analysis published on Mondaq, are practical ones. Issuance would generally occur at the issuer's first transfer that gives another person the right to use, transfer, convert, redeem or repurchase the token, and a later transfer after the issuer redeems or reacquires a coin would count as a fresh issuance. Issuance would generally take place in the U.S. if the issuer is located here or the coin goes to a person located here, while foreign issuers could get protection for certain transactions if they reasonably believe the recipients are outside the country and keep appropriate controls in place.
The calendar in Treasury's release is the part every payments team should pin to the wall. Starting January 18, 2027, the Act's expected effective date, a person generally may not issue a payment stablecoin in the United States without an appropriate federal or state license. Starting July 18, 2028, digital asset service providers generally may not offer or sell payment stablecoins to people in the U.S. unless a licensed issuer, or a qualifying foreign issuer, stands behind them. Before relying on a foreign issuer's promise that it can comply with lawful orders, providers would have to do reasonable due diligence.
Read individually, each proposal looks like routine rulemaking. Read together, they show how compressed the schedule has become. Treasury's comments close October 19. The Fed's close November 30. PYMNTS reported that Comptroller of the Currency Jonathan V. Gould said in August the OCC would have a final GENIUS Act rule out by November. Treasury still points to January 18, 2027 as the expected effective date for licensing.
That leaves very little room between final rules and the moment they bite. For issuers, the practical consequence is that compliance work cannot wait for final text. Reserve composition, custody arrangements, capital planning and application packages all have to be built against proposals that may still change. For banks weighing whether to launch a stablecoin subsidiary, the Fed's application process is effectively the front door, and the queue will form early.
Most businesses will never issue a stablecoin. Many more will accept one, settle in one, or work with a processor that does. The emerging rulebook shifts some of the diligence burden onto that middle layer. Treasury's framework puts obligations on service providers that offer or sell tokens, and the 2028 restriction means a platform could eventually be unable to offer a coin to U.S. users if its issuer is not licensed or qualifying.
That creates a sensible checklist for any company exploring stablecoin settlement:
Fed Governor Michael S. Barr, in a statement accompanying the proposals, said public input would be useful on reserve asset limits and capital requirements and on whether the rule addresses interest rate and foreign currency risks, according to PYMNTS. He also said "further work will undoubtedly be required" before stablecoins can be reliable payment instruments. Crowdfund Insider reported that he stressed redemption rights must be clear so holders can trust they can convert tokens to dollars even in stressed markets.
Those are the right pressure points. A stablecoin backed by short-dated Treasuries is only as good as the speed and certainty with which a holder can turn it back into dollars when markets are moving fast. Capital rules that ignore rate risk or currency mismatches would leave a gap precisely where past runs on money-like instruments have started.
Three things over the next few months will tell you how this lands. First, the volume and substance of comments filed by October 19 on Treasury's definitions, especially from foreign issuers and exchanges trying to preserve access to U.S. users. Second, whether the OCC delivers a final rule in November as its leader signaled, which would give the market its first binding text. Third, how the Fed handles reserve limits and redemption in its final version after the November 30 deadline. If those pieces arrive roughly on schedule, January 2027 becomes the start of a licensed stablecoin market in the U.S. If they slip, the effective date will arrive with more uncertainty than anyone building on these rails should want.
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