Fed races to finalize GENIUS Act rules before Saturday deadline

The Federal Reserve is working urgently to publish implementing rules for the GENIUS Act before the July 18 statutory deadline, Chair Kevin Warsh said Monday, as stablecoin issuers await clarity on which entities can operate in the US market.

"We are moving as quickly as possible to meet the statutory timeline," Warsh said. "The rulemaking is complex because it must define who qualifies as a permitted issuer and under what conditions."

The GENIUS Act, signed into law July 18, 2025, requires primary federal regulators, Treasury, and state payment stablecoin regulators to issue implementing regulations through notice-and-comment rulemaking within one year of enactment. The OCC published its initial proposal in February, covering applications, registration, supervision, reserves, redemption, and capital requirements for national bank subsidiaries, federal savings associations, foreign payment stablecoin issuers, and nonbank entities. Treasury's FinCEN and OFAC followed with a proposal subjecting permitted issuers to Bank Secrecy Act anti-money-laundering and sanctions requirements.

The law takes effect on the earlier of 18 months after enactment or 120 days after regulators finalize the implementing rules, according to the OCC. If the Fed and other agencies miss the Saturday deadline, the effective date could slip, leaving issuers including Circle Internet Group, which received OCC trust bank approval in June, and Sony, which won approval for a US trust bank subsidiary, in regulatory limbo. The GENIUS Act generally bars anyone outside the permitted issuer category from issuing a payment stablecoin in the United States.

Three issuer gates, one deadline

The rulemaking deadline applies to the primary federal payment stablecoin regulator, Treasury, and state payment stablecoin regulators, not to issuers directly. But without finalized rules, state-qualified issuers cannot determine whether their home state's regulatory regime is substantially similar to the federal framework — a prerequisite for market access under the law.

Foreign payment stablecoin issuers face a separate barrier. The GENIUS Act gives Treasury one year from enactment to issue rules governing foreign-issuer access, including registration, rejection, appeals, and rescission procedures. The OCC's February proposal outlined the process for foreign issuers under its jurisdiction, but reciprocal arrangements remain undefined until Treasury's rules are final.

Stablecoin market grows as clock ticks

The stablecoin market has expanded rapidly while regulators deliberate. Transaction volume hit a record $1.79 trillion in June, according to Visa data. Circle's USDC has more than $73 billion in circulation, while a consortium of more than 140 companies including BlackRock, Coinbase, Mastercard, Stripe, and Visa launched the Open USD stablecoin effort in June, distributing reserve yields to participating partners rather than a single issuer.

The CLARITY Act, the market-structure legislation designed to complement the GENIUS Act, faces its own timeline pressure. The bill has 20 Senate working days before the August 7 recess, with prediction markets pricing 2026 passage at 48%, down from 74% a month ago.

For stablecoin issuers, the stakes are clear: the July 18 deadline determines not just when the rules arrive, but which companies get through the US market's front door — and which are left waiting.

This article is for informational purposes only and does not constitute investment advice.