(SeaPRwire) –
By: Elena Rostova
The U.S. Treasury is moving on the GENIUS Act while the clock is already running red. A year passed without the promised final rules. July came and went without a completed rulemaking package. Now January 18 sits on the calendar as the law’s effective date, and several key rules may still be unfinished when that deadline arrives. Treasury Secretary Scott Bessent says the administration wants speed and clarity. That is not the problem. The problem is that speed and clarity cannot be manufactured overnight when banking regulators, market regulators, and Congress itself are all out of sync. The Senate failed to begin key votes on the Digital Asset Market Clarity Act before the August recess. Congress could still rewrite portions of the very framework Treasury is trying to codify. You are watching a regulatory machine attempting to sprint with one foot still in the air.
Treasury’s proposed rule defines who counts as a payment stablecoin issuer under federal law. That definition is the load-bearing wall of the entire GENIUS Act framework. Without it, no issuer knows whether they are covered. The department explicitly argues that payment stablecoins serve settlement and transaction functions. They should not automatically inherit the full weight of traditional securities rules. That distinction is deliberate. It comes from reviewing older securities precedents and deciding the payment use case is different enough to warrant its own regulatory lane. The proposal follows an advance notice published in September 2025. Stablecoin issuers and financial firms now have a 60-day window to submit public comments. Treasury also included dozens of open questions it must resolve before finalizing the rule. One cluster of questions points squarely at foreign issuers. Tether is named among the firms that could face close scrutiny. The department must determine how federal obligations reach companies operating outside U.S. jurisdictional boundaries.
This is where the compliance loop becomes genuinely complicated. Treasury is drawing a line around payment utility as a regulatory category. That line has to hold up against companies whose primary operations, reserve custody, and legal domicile all sit abroad. A U.S. rule cannot simply reach across oceans without enforcement architecture. Treasury must coordinate with agencies that have not yet published their own standards. The commentary period will surface arguments about definition scope, transition timelines, and the practical cost of compliance for issuers with millions of users. Industry participants will push back on anything resembling extraterritorial overreach. They will also test whether the payment-versus-investment distinction can survive contact with real products that blur both categories. The Clarity Act adds another layer of uncertainty. If it modifies the GENIUS Act’s treatment of stablecoin reward programs on exchanges, Treasury’s proposed framework shifts underneath itself mid-process. The likely enforcement outcome is not a clean federal regime landing on January 18. It is a staggered rollout. Some definitions finalize. Others drift. Foreign issuers operate in a gray zone until courts or subsequent amendments force resolution. The market adapts to whatever partial framework actually materializes, and the gap between the law’s text and its operational reality becomes the real story.
Author bio: Elena Rostova, a public policy expert specializing in compliance assessments for governments and sovereign wealth funds.