U.S. Treasury Proposes GENIUS Act Stablecoin Rule: What Accounting Firms and CFOs Must Assess Now
The U.S. Treasury Department has published its first substantive proposed rule under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, opening a 60-day public comment period that closes in mid-October 2026. For accounting firms, auditors, and CFOs whose clients issue, hold, or transact in stablecoins, this is the most consequential U.S. regulatory development in the stablecoin space since the Act passed. The proposal is not yet final, but it is detailed enough to require immediate attention from finance and compliance teams involved in stablecoin accounting and reporting.
Background: The GENIUS Act and the Rulemaking Timeline
Congress passed the GENIUS Act to create the first comprehensive U.S. federal licensing and oversight framework for stablecoin issuers. The law assigned Treasury, alongside banking and markets regulators, the task of writing implementing rules within one year of enactment. That one-year deadline passed last month without the full ruleset in place. The next statutory milestone is the law's effective date, currently targeted for 18 January 2027, and there is significant doubt within the industry that all required rules will be finalised before then.
Who else is writing rules under GENIUS
Treasury is one of several agencies responsible for GENIUS Act implementation. Banking regulators and markets regulators each carry their own rulemaking obligations under the statute. The Treasury proposal released this week addresses definitional and jurisdictional questions that underpin the entire framework, making it foundational to everything the other agencies will eventually build on.
The Clarity Act complication
Implementation is happening in parallel with Congressional efforts to pass the Digital Asset Market Clarity Act, which would amend portions of GENIUS, most notably provisions relating to stablecoin customers on exchanges. The Clarity Act stalled before key Senate votes earlier this month and the Senate has since begun its August recess. Until the legislative picture settles, the regulatory ground remains in motion, which matters for anyone drafting accounting policies or compliance frameworks that reference the statutory text directly.
What the Proposed Rule Actually Says
The Treasury proposal focuses on two foundational questions: what counts as a payment stablecoin under the GENIUS Act, and who is required to follow the rules. Getting both definitions right matters enormously for stablecoin accounting because they determine which instruments fall inside the regulatory perimeter and which disclosure and reserve requirements apply.
Payment stablecoins treated as a distinct category
Treasury states explicitly that it approached the rulemaking by treating payment stablecoins as a genuinely new type of financial instrument rather than forcing them into existing frameworks. The department studied established securities laws, including rules governing the offer and sale of other financial instruments, as a reference point. But it concluded that applying those traditional investment-law frameworks to instruments designed for payment and settlement would undermine the Act's stated purpose. That distinction has direct accounting consequences: if a stablecoin is regulated as a payment instrument rather than a security, the applicable recognition, measurement, and disclosure model differs from what would apply under securities law.
Cross-border activity and foreign issuers
One of the most-watched aspects of the proposal is how it handles foreign issuers. The largest stablecoin by market capitalisation is issued by a non-U.S. entity, and the industry is watching closely to see whether and how offshore issuers operating in U.S. markets will be brought within scope. The proposal poses specific questions on this point and invites comment, meaning the final answer is not yet settled. Accounting teams advising clients that use or accept tokens from foreign issuers should monitor this thread carefully, as the reserve and attestation requirements applicable to those tokens could differ materially from those that apply to domestically licensed issuers.
Dozens of open questions
The proposal includes dozens of questions on which Treasury is explicitly seeking input before finalising the rule. Each question represents a live policy choice that could alter the compliance and accounting obligations of issuers and their counterparties. The comment window runs for 60 days from publication, with responses due in mid-October 2026. After comments close, Treasury must review submissions and issue a final rule, a process that typically takes additional months. The January 2027 effective date therefore looks tight for a fully settled rulebook.
Stablecoin Accounting Under US GAAP: Where Things Stand
The Treasury proposal does not itself dictate accounting treatment. That remains the domain of the Financial Accounting Standards Board (FASB). However, the regulatory definitions Treasury is now establishing will inform how auditors and standard-setters think about the nature of stablecoin instruments, and that matters for firms already grappling with the right accounting model to apply.
ASC 350-60 and fair value measurement
FASB's ASC 350-60 guidance, which requires certain crypto assets to be measured at fair value with changes recognised in net income, currently applies to crypto assets that meet the standard's scope criteria. Payment stablecoins, by design, are intended to maintain a stable value relative to a reference asset such as the U.S. dollar. Whether a specific stablecoin falls within ASC 350-60 scope, or whether it is better characterised as a cash equivalent or a financial instrument under other GAAP guidance, depends partly on the legal and economic features the token carries. The GENIUS Act definitions, once finalised, will clarify those features for regulated U.S. issuers, giving auditors a firmer foundation for scope conclusions.
Reserve assets and balance sheet presentation
Under the GENIUS Act framework, licensed stablecoin issuers are required to hold high-quality liquid assets as reserves against circulating tokens. How those reserve assets are presented on the issuer's balance sheet, and whether the corresponding token liability is classified as a financial liability, a deposit, or another instrument, remains an active area of judgment for preparers and their auditors. The Treasury rule's definition of what qualifies as a payment stablecoin will shape the liability-side classification question. Firms advising issuers or institutional holders should begin mapping current accounting policy choices against the proposed definitions now, so that any required adjustments can be scoped and planned rather than reactive.
Implications for IFRS preparers
Accounting firms serving multinational clients need to track both frameworks. Under IFRS, crypto assets are currently addressed through a patchwork of existing standards rather than a dedicated standard. The IASB has signalled interest in the area but has not yet issued targeted guidance comparable to ASC 350-60. For IFRS preparers holding stablecoins, the question of whether a token is a financial instrument under IFRS 9, an intangible asset under IAS 38, or another category turns on contractual features that the GENIUS Act definitions will now start to pin down on the U.S. side. Our earlier analysis of ICAEW stablecoin accounting, tax, and assurance analysis covers how these classification questions play out under UK and international frameworks.
Practical Implications for Accounting Firms and CFOs
The proposal is at the comment stage, which means accounting and compliance teams have a window to engage with the process and to prepare for multiple outcome scenarios before the final rule lands.
Review your current stablecoin accounting policy
Any firm whose clients hold USDC, USDT, or other payment stablecoins on their balance sheet should review the current accounting policy in light of Treasury's proposed definitional framework. The key questions are whether the instrument in question is likely to fall inside the GENIUS Act's regulatory perimeter, how the reserve and attestation requirements will affect the evidence base for audit purposes, and whether the liability classification applied by the issuer is consistent with what the finalised rule will require. For issuers specifically, policy documents drafted before the GENIUS Act passed may need a structured review and update cycle tied to the rulemaking timeline.
Prepare for attestation and disclosure requirements
The GENIUS Act anticipates regular public disclosure of reserve compositions and periodic attestation or audit of those reserves. The precedent set by recent third-party audits of major stablecoin issuers, covered in detail in our piece on Tether's KPMG audit and what it signals for stablecoin accounting, illustrates the assurance challenges involved. Firms that provide or expect to provide attestation services to stablecoin issuers should begin scoping the engagement standards, materiality considerations, and systems access requirements now rather than waiting for the final rule.
Monitor the comment process and the Clarity Act
The 60-day comment window is an opportunity for accounting and legal practitioners to shape how definitions are drawn. Industry associations representing accounting firms have historically engaged in SEC and FASB comment processes; the Treasury GENIUS Act rulemaking deserves the same level of attention. In parallel, the fate of the Digital Asset Market Clarity Act will determine whether the statutory text that Treasury is now interpreting will itself be amended, potentially requiring a further round of rulemaking.
Foreign issuer exposure
CFOs at companies that hold or accept stablecoins issued outside the United States should flag the foreign-issuer question as a priority risk item. If Treasury's final rule brings offshore issuers within scope of GENIUS Act requirements for U.S.-market activities, the reserve and disclosure standards those issuers must meet will change, which in turn affects how their tokens should be evaluated for credit and liquidity risk on a corporate balance sheet. If offshore issuers are treated differently, the accounting and risk treatment for those tokens may diverge from domestically licensed products, creating classification complexity.
Timeline and Next Steps
The current rulemaking schedule leaves significant uncertainty heading into year-end. The comment window closes mid-October 2026. Treasury then reviews submissions and issues a final rule, a process that typically extends several months beyond the comment close. The statutory effective date is 18 January 2027. Given that banking and markets regulators must also complete their own GENIUS Act rules, and given that the Clarity Act could yet amend the underlying statute, a full, settled regulatory framework before that date appears unlikely. New rules typically include transition periods, but the length and scope of any such runway is not yet determined.
Treasury Secretary Scott Bessent framed the proposal as part of a broader effort to deliver regulatory certainty, reinforce the U.S. dollar's reserve currency status, and position the United States as the global centre for crypto activity. That framing signals strong political will to move the process forward, even if the calendar pressure is real.
For accounting firms, auditors, and CFOs, the practical message is straightforward: the GENIUS Act rulemaking is no longer a future event. It is an active process with defined milestones, and the policy choices being made now will directly shape the stablecoin accounting, disclosure, and assurance landscape for years to come.
Source: CoinDesk Policy
Frequently Asked Questions
What does the Treasury GENIUS Act proposal cover?
The proposal sets out core definitions for what qualifies as a payment stablecoin under the GENIUS Act and establishes who must comply with the law's requirements. It also seeks public comment on how foreign issuers should be treated, among dozens of other open policy questions.
How does the GENIUS Act affect stablecoin accounting under US GAAP?
The Act does not itself dictate GAAP treatment, but its definitions will clarify the legal and economic features of regulated stablecoins, which in turn informs auditors' scope conclusions under FASB ASC 350-60, balance sheet classification of reserve assets, and the liability-side treatment of tokens in circulation.
When do the GENIUS Act rules take effect?
The statutory effective date is 18 January 2027. However, Treasury and other required agencies are already past the one-year implementation deadline set by the Act, and a fully settled rulebook before the effective date appears unlikely. Transition provisions will almost certainly be included in any final rule.
What should accounting firms do during the 60-day comment period?
Firms should review how proposed definitions interact with their clients' current stablecoin accounting policies, consider submitting comments on open questions that affect audit and assurance practice, and begin scoping attestation engagements for issuer clients so that systems and methodology are ready before final rules arrive.
Does the proposal affect IFRS preparers as well as US GAAP filers?
Directly, the proposal applies to U.S.-regulated entities. But multinational groups and IFRS preparers holding or accepting regulated U.S. stablecoins will need to understand the reserve, disclosure, and licensing requirements that their counterparties are subject to. Those requirements affect credit-risk assessment, financial-instrument classification, and the evidence available for audit purposes under any accounting framework.