The public comment period on the US Treasury’s first GENIUS Act rule on who may issue and sell stablecoins closed on Monday, 19 October 2026, and the crypto industry’s main lobby used the last day to ask for narrower lines. The Blockchain Association filed a 26-page letter asking Treasury to keep self-custody software and validators outside the rule, to require actual knowledge before anyone faces criminal liability, and to ease the checks exchanges must run on foreign issuers, according to The Block. Coindaro has not seen the letter itself; its content below comes from press reports.
On the other side, Better Markets, a Washington group that campaigns for tougher financial rules, filed the same day and asked for the opposite on the same clauses: verified, ongoing checks on foreign issuers and fewer exemptions based on where a customer seems to be.
The proposal, published in the Federal Register on 18 August as 91 FR 53368 (docket TREAS-DO-2026-0496), would create a new part 1523 in Title 12 of the Code of Federal Regulations. It turns section 3 of the GENIUS Act, the stablecoin law signed on 18 July 2025, into detailed rules. Federal Register data still showed 113 comments posted on the docket at 04:01 UTC on 20 October, as public posting lags behind filing; The Block counted 123 submissions after the close. Treasury has not said when it will publish a final rule.
Much of the attention falls on one question nobody can answer yet: which foreign stablecoin regimes, if any, Treasury will find “comparable” to the American one. No country has received that finding.
What Treasury’s GENIUS Act rule would do
Section 3 of the Act sets two bans. Only a “permitted payment stablecoin issuer” may issue a payment stablecoin in the United States. And, from 18 July 2028, three years after enactment, a digital asset service provider (exchanges, brokers, custodians and similar businesses, called DASPs in the text) may not offer or sell a payment stablecoin to a person in the US unless a permitted issuer stands behind it. The Treasury notice explains how it reads both bans and adds definitions, safe harbours and examples.
The draft defines who counts as an “issuer” and when an issuance or a sale takes place “in the United States”. A firm located outside the country would be deemed not to issue in the US if it reasonably believes every recipient is abroad, runs controls designed to keep US persons out and does not aim advertising at them. Exchanges get a parallel safe harbour built on the same “reasonably believes” test.
There is no exception for reverse solicitation. Answering an unsolicited request from a US person would itself be an offer, the law firm Freshfields noted in its analysis of the draft.
The proposal also gives three non-exclusive examples of what it means to “knowingly participate” in an unlawful issuance. That matters because section 3(f) of the Act punishes it with a fine of up to $1 million per violation, up to five years in prison, or both. A firm that only handles the technical minting of a coin, or lends its brand in a white-label deal, may fall short of being an issuer and still be caught by that penalty, the notice says.
Treasury put 87 numbered questions to the public. It also described options it turned down. One was a longer transition, for example 36 months, with a safe harbour for unregistered foreign coins with less than $1 billion of US-held capitalisation; Treasury concluded that the delayed consumer protection would cost far more than the transition saved. Stricter options, such as dropping the offshore safe harbours or the “reasonable belief” standard for exchanges, were judged to add compliance burden and push activity offshore for little gain. A framework modelled on the SEC’s Regulation S was also set aside as harder to enforce.
Two gates for foreign stablecoin issuers, and no country found comparable
Foreign issuers face two separate tests in the Act, and they are easy to confuse.
The first applies from the Act’s effective date. Under section 3(b)(2), an exchange or broker may not offer, sell or otherwise make available in the US a stablecoin from a foreign issuer unless that issuer has the technical ability to comply, and will comply, with lawful orders (to freeze or seize tokens, for example) and with any reciprocal arrangement under section 18. Treasury’s draft lets the exchange rely on the issuer’s own representation, after “reasonable due diligence”, but not if it knows or has reason to know the claim is false. Question 52 asks how far that diligence should go, including what to make of issuers that advertise their coins as resistant to freezing.
The second gate comes with the July 2028 ban. A foreign issuer can escape it through section 18 of the Act, which sets four conditions: its home regulator runs a regime that the Treasury Secretary has determined to be comparable to the US one, the issuer is registered with the Office of the Comptroller of the Currency (OCC), it holds enough reserves at a US financial institution to meet US customers’ liquidity needs (unless a reciprocal arrangement says otherwise), and its home country is not under comprehensive US sanctions or flagged as a primary money laundering concern.
The comparability finding is not Treasury’s alone. The Secretary may make it only on a recommendation from each other member of the Stablecoin Certification Review Committee, which the Act defines as the Federal Reserve chair (or the vice chair for supervision) and the FDIC chair. Treasury must publish a justification in the Federal Register before a finding takes effect, and must keep a public list of the countries found comparable. When an issuer or a foreign regulator asks, the Secretary has 210 days from a substantially complete request to decide.
No regime has been found comparable so far. Treasury “has not yet proposed a rule establishing the process”, Freshfields wrote on 25 August, so the January restriction on foreign coins arrives before any clear path to eligibility exists. The Act itself asked Treasury to issue rules for section 18 within a year of enactment. Zyphe wrote on 19 August that no jurisdiction had cleared the bar, the EU, the UK, Singapore, Japan and the United Arab Emirates included, and estimated that the earliest realistic findings would come “well into 2027”; that timing is its own estimate.
What it could mean for Tether’s USDT: open questions
Neither “Tether” nor “USDT” appears anywhere in the Federal Register notice. Yet the largest dollar stablecoin, Tether’s USDT, is issued outside the US by a group that announced in January 2025 it was moving its headquarters to El Salvador after obtaining a licence there, so both gates apply to it.
Several things are unknown. Whether US exchanges will accept Tether’s own representation that it can and will comply with lawful orders from January is up to each of them, under a due diligence standard that is still being written. Whether El Salvador’s regime could ever be found comparable has not been assessed by Treasury or, as far as we found, by any public analysis. Tether also launched a separate US coin, USAT, in January 2026, issued through Anchorage Digital Bank, Unchained reported. That gives it one route around the foreign-issuer question, but it does not settle the status of USDT itself.
One commentator read the draft harshly. Austin Campbell of Zero Knowledge Group said on the Bits + Bips podcast on 17 August, quoted by Unchained: “I’m starting to think Coinbase’s US platform might have to delist Tether.” That is one person’s reading of a proposal, not a decision by Treasury or Coinbase.
Is MiCA comparable? Not decided
The same uncertainty covers Europe. The EU’s MiCA regulation already licenses stablecoin issuers, and Circle’s French entity received an electronic money licence from the ACPR, France’s banking supervisor, in July 2024, which the company said lets it issue USDC and EURC in the EU under MiCA. That makes MiCA an obvious candidate for a comparability request, but no request or finding has been made public, and nothing in the Act or the draft says MiCA qualifies. Any claim that it does is, for now, a forecast.
The EU has already run its own version of this gate. Coinbase removed USDT for users in the European Economic Area from 31 March 2025 under MiCA, and Crypto.com and Binance followed that quarter, Unchained recalled. ESMA has since given EU crypto firms until January to drop non-MiCA stablecoins.
What the Blockchain Association asks Treasury to change
The association backs the rule’s core aim of safe stablecoins from regulated issuers with adequate reserves, The Block reported. In a post on X quoted by The Block, it said: “Our letter seeks clearer lines so the final rule matches what Congress wrote.” Its requests, as described by The Block, crypto.news and CryptoBriefing, fall into a handful of areas.
First, the definition of a DASP. “Congress wrote that definition for businesses serving customers,” the association said, according to The Block, and in its reading Congress left out “core infrastructure like self-custody software and validators”. Firms trading only their own assets should not be swept in either. Building or running underlying infrastructure should not on its own make someone a DASP, crypto.news reported. The Act itself already leaves out direct person-to-person transfers and self-custody through software or hardware wallets.
Second, criminal exposure. The group wants liability for “knowing participation” to require “actual knowledge and substantial assistance in coordination with the issuer”, and says ordinary trading on secondary markets should not count. According to crypto.news, it also argued that Treasury should not use that clause to impose general distribution limits on service providers before the July 2028 date Congress set.
Third, foreign issuers. Exchanges often have no direct relationship with a foreign issuer, so the association opposes “open-ended due diligence” and wants them to be able to rely on regulators’ public lists of prohibited issuers. It would replace the “reasonably believes” location test with actual knowledge plus information gathered in the ordinary course of business. On a permissionless protocol, a participant may see nothing but a wallet address, and the group argues that permissionless protocols should not take on new wallet identification or geolocation duties when a counterparty’s location cannot reasonably be known.
Fourth, scope and timing. CryptoBriefing reported that the association asked Treasury to drop an open-ended “functional equivalent” test, to revisit its compliance cost estimates and to align effective dates with the other rules the GENIUS Act requires.
That “functional equivalent” point is about what counts as a payment stablecoin, not about foreign issuers. It comes from Question 5 of the notice: the Act lists national currencies and bank deposits as the “monetary value” a stablecoin must be redeemable in, and Treasury asked whether coins redeemable in other forms of value that may be their functional equivalent, such as credit union shares, should also fall within the definition. Press reports describe the association’s answer only briefly, and we could not check the letter’s exact wording.
Better Markets wants the same clauses made tougher
Better Markets attacks the same provisions from the opposite side. It says the proposal “risks undermining those safeguards” the Act was written to provide, because exchanges could rely on a foreign issuer’s word about complying with lawful orders without checking it, and because some otherwise banned transactions could be exempted on a firm’s belief that a customer is outside the US.
Its letter asks Treasury to require exchanges and other intermediaries to verify, with documented due diligence and ongoing monitoring, that a foreign issuer can actually freeze, seize or restrict its coins. It wants the “reasonable belief” location safe harbours removed or narrowed, broad offshore and reverse-solicitation exceptions rejected, and arrangements that bring non-compliant coins to Americans through foreign intermediaries banned. It also asks for a fuller analysis of costs, benefits and alternatives.
Better Markets wants a fuller cost analysis, and CryptoBriefing reports that the association asked Treasury to revisit its cost estimates too. On the “reasonably believes” test and on diligence over foreign issuers, one side wants less and the other wants more.
Other companies and trade groups may well have filed; the docket holds more than 100 comments. Coindaro has not confirmed any other filing on this notice. Several firms, including Circle, Coinbase and a16z crypto, did send letters in November 2025 on Treasury’s earlier advance notice, which asked broader questions before any text was drafted. Treasury’s docket also records meetings with industry during the comment window, including with the Digital Chamber and Societe Generale on 1 October.
GENIUS Act effective date: 18 January 2027 is expected, not fixed
Many pages, ours included, give 18 January 2027 as the day the GENIUS Act takes effect. The law is more precise. Section 20 of Public Law 119-27 says the Act takes effect on the earlier of two dates: 18 months after enactment, or 120 days after the primary federal stablecoin regulators issue any final regulations implementing it.
Eighteen months after 18 July 2025 is 18 January 2027. Treasury’s notice says the effective date “is expected to be January 18, 2027”, and the word “expected” is Treasury’s own. On our arithmetic, the 120-day route could only have brought the date forward through a final rule issued before about 20 September 2026. Freshfields noted in late August that none had been finalised, and we found no report of one since. The OCC’s rule, due by November, would set a 120-day mark well after 18 January. Our page on the GENIUS Act effective date sets out what changes that day.
| Date | What happens | Source |
|---|---|---|
| 18 July 2025 | GENIUS Act signed into law | Public Law 119-27 |
| 18 August 2026 | Treasury section 3 proposal published (91 FR 53368) | Federal Register |
| 19 October 2026 | Comment period closed; 123 submissions counted by The Block (113 posted on the docket by 20 October) | The Block; Federal Register data |
| 18 January 2027 | Expected effective date; foreign-issuer gate of section 3(b)(2) starts | Federal Register notice |
| 210 days after a complete request | Deadline for a Treasury decision on a country’s comparability | GENIUS Act, section 18(b) |
| 18 July 2028 | Exchanges may only offer coins from permitted issuers or issuers under the section 18 route | GENIUS Act, section 3(b)(1) |
What changes for stablecoin holders and platforms
For US users, nothing changes today. The comment period is a step in rulemaking, and the draft can still move in either direction. The practical risk is narrower than a ban on any coin: from the effective date, a US platform will have to stand behind its decision to list a foreign-issued stablecoin, with records of its diligence, and the final rule will decide how much diligence that means.
For developers and DeFi users, the stakes sit in definitions. If Treasury keeps a wide reading of who is a DASP and what “knowing participation” covers, people who build or operate infrastructure could face questions they do not face today. If it adopts the association’s narrower reading, most of that risk falls away. Our beginner’s guide to stablecoins explains how issuers, reserves and redemption work.
For readers in Europe, the US rule does not change MiCA. It does mean that a coin authorised in the EU will not, on that basis alone, have access to US platforms after July 2028; a comparability finding for the EU regime would be needed, or an issuer licensed in the US.
What happens next
Treasury now has to read the comments and decide whether to change its draft, and it has given no date for a final rule. The rule is one piece of a wider set. The OCC, which will license and supervise many issuers, is writing its own rules, and Comptroller Jonathan Gould said the agency would finalise them by November, Freshfields reported. FinCEN and OFAC proposed anti-money-laundering and sanctions rules for issuers on 10 April 2026 (91 FR 18582), which this notice cross-references.
The dates to watch are 18 January 2027, when the first foreign-issuer gate is expected to start, the publication of a process for comparability requests, and any first request from a foreign regulator, which would start the 210-day clock. Until a country appears on Treasury’s list, an offshore issuer has no section 18 route onto US platforms after July 2028.