The US Treasury Department has proposed a licensing framework for payment stablecoin issuers under Section 3 of the GENIUS Act, setting out a timeline that would bring the sector under a formal federal or state approval process.

Under the proposal, issuers would need to hold a federal or state license beginning January 18, 2027. A later deadline, July 18, 2028, would prohibit digital asset service providers from offering unlicensed stablecoins to US persons. The measure is still at the proposal stage, and public comments are open until October 19, 2026.

A two-step compliance schedule

The proposal outlines separate compliance dates for issuers and for the platforms and intermediaries that distribute stablecoins. The first step would apply directly to payment stablecoin issuers, which would be required to obtain either a federal or state license from January 18, 2027.

The second step would take effect on July 18, 2028. From that point, digital asset service providers would be barred from offering unlicensed stablecoins to US persons, extending the rule's impact beyond issuers themselves and into the broader market infrastructure.

Why the rules matter for stablecoins

Stablecoins play a large role across crypto markets and related payment activity. They are used in trading, settlement, remittances, decentralized finance, and as a form of dollar access outside the traditional banking system.

A licensing regime would move oversight closer to the standards commonly associated with banking and payments. According to the proposal's framing, that would involve expectations around reserves, supervision, compliance, reporting, and redemption, while also requiring service providers to identify which stablecoins can legally be made available to US users.

Federal and state licensing options

Treasury's proposal would permit either a federal or a state path to licensing. That dual approach suggests an attempt to balance national oversight with existing or future state-level regulatory systems.

At the same time, the structure could create practical questions. The eventual effect may depend on how state supervision compares across jurisdictions, how reciprocity is handled, and how reserve standards, examination authority, and enforcement coordination are defined and applied.

Possible market effects if adopted

The 2028 deadline could have broad implications for exchanges, wallets, payment applications, custody platforms, DeFi front ends, and other intermediaries that make stablecoins available to US users. If the restriction on unlicensed products is enforced strictly, the market could shift toward stablecoins issued under approved regimes.

That may favor larger issuers that are better able to absorb compliance costs and maintain the required controls, while putting pressure on smaller or offshore issuers. The result, if the rule is finalized in a similar form, could be a more concentrated stablecoin market with fewer issuers.

Comment period and next steps

The proposal was published on August 21 following Treasury's August 18 action, opening a formal comment process that runs through October 19, 2026. Responses are likely to focus on definitions, deadlines, licensing standards, reserve requirements, service-provider obligations, and the boundary between federal and state oversight.

Treasury can revise the measure after reviewing comments, so the current text is not yet final law. For now, the proposal offers the clearest confirmed timeline in the process: licensing for issuers starting in early 2027, followed by restrictions on service providers offering unlicensed stablecoins to US persons in 2028.

Source: www.newsbtc.com