On August 17, 2026, the U.S. Department of the Treasury ("Treasury") issued a Notice of Proposed Rulemaking seeking public comments related to implementing Section 3 of the GENIUS Act.  The Proposal would establish a new Part 1523 in Title 12 of the Code of Federal Regulations (“CFR”), defining who may issue, offer, sell, or otherwise make available payment stablecoins in the United States, and filling in several terms the statute leaves undefined.

The proposed rule turns on several key definitions:

• Issue is defined as the first transfer of a stablecoin by the issuer, either directly or indirectly, including crediting an account, that gives a third party the right to use, transfer, or redeem it. Coins held in an issuer's own treasury are not yet "issued"; redemption followed by a later re-transfer counts as a new issuance.
• Issuer is defined as a person obligated to convert, redeem, or repurchase the stablecoin for fixed monetary value and who represents or creates a reasonable expectation of maintaining stable value. This is distinct from parties that merely provide branding or minting services, who may still face liability for "participating" in an unlawful issuance.
• Located in the United States turns on physical presence for individuals, with a carve-out for temporarily present non-residents, and on incorporation or principal place of business for entities.
• Digital asset service provider ("DASP") can overlap with "issuer." Treasury rejected treating the categories as mutually exclusive, reasoning that a contrary reading would let issuers evade the Act's offer-and-sale restrictions.

The Proposal also addresses foreign payment stablecoin issuers, concluding that those satisfying the requirements of Section 18(a), including the applicable registration and comparability requirements, may issue payment stablecoins in the United States, rather than being limited to offering or selling them into the U.S. market. It proposes a safe harbor for offshore issuance: a non-U.S. issuer will not be deemed to have issued a payment stablecoin “in the United States” if it is not itself located in the United States, reasonably believes the recipients are not located in the United States, has implemented controls reasonably designed to prevent issuance to U.S. persons, and does not engage in advertising or solicitation targeted at U.S. persons. This framework draws on, but does not fully adopt, Regulation S principles; Treasury separately seeks comment on whether it should adopt a more comprehensive Regulation S–style framework for offshore issuance.

For DASPs handling foreign-issued coins, the Proposal allows reliance on an issuer's compliance representations, conditioned on reasonable due diligence and the absence of any actual or constructive knowledge that the representation is false.

Treasury poses 87 questions for comment, concentrated on the timing of "issuance," the scope of "located in the United States," and whether to adopt a full Regulation S–style offshore framework instead.