Which stablecoins can US merchants accept? Treasury just proposed the rule that decides

What Treasury proposed on August 18, 2026

On Tuesday, August 18, 2026, the Department of the Treasury published a notice of proposed rulemaking implementing section 3 of the GENIUS Act — the part of the statute that sets out the prohibitions and limitations on payment stablecoin issuance, offer and sale in the United States. It runs at 91 FR 53368 under RIN 1505–AC95, docket TREAS–DO–2026–0496, and it proposes a new 12 CFR part 1523.

The comment period is open. Comments must be received on or before October 19, 2026. Treasury Secretary Scott Bessent framed the release as moving quickly to implement the framework and welcoming input from stakeholders, and the department opened submissions through regulations.gov.

This is not the abstract, wait-and-see phase of stablecoin regulation. It is the phase where the operative definitions get written — issued in the United States, offer or sale, located in the United States, digital asset service provider — and where the answer to "which stablecoins can US merchants accept" stops being a matter of opinion and starts being a matter of drafting.

The two dates every merchant should have in the calendar

The proposal is structured around two different clocks, and conflating them is the most common mistake in the coverage.

January 18, 2027 — the Act's expected effective date. Proposed § 1523.3(b) carries no future trigger date. It would make it unlawful for a digital asset service provider to offer or sell to a person located in the United States — or otherwise offer, sell or make available in the United States — a payment stablecoin issued by a foreign payment stablecoin issuer, unless that foreign issuer has the technological capability to comply, and will comply, with the terms of any lawful order and any reciprocal arrangement under section 18 of the Act. Proposed § 1523.3(c) lets a provider rely on a representation from the foreign issuer to that effect.

July 18, 2028 — three years after enactment. Proposed § 1523.3(a) implements section 3(b)(1): beginning on that date, it would be unlawful for a digital asset service provider to offer or sell a payment stablecoin to a person located in the United States unless the coin is issued by a permitted payment stablecoin issuer, or by a foreign issuer that meets the section 18(a) criteria.

Read together: the near-term constraint is about a foreign issuer's ability and willingness to honour lawful orders. The 2028 constraint is about licensing. Neither is a coin blacklist, and neither is written at merchants. But both shape which coins the platforms and providers around you will keep offering — which is how regulation of the supply side eventually reaches the demand side.

Is a merchant a "digital asset service provider"?

Everything in section 3 hangs on that term. Proposed § 1523.1(c) defines "digital asset service provider" by cross-reference to section 2(7) of the Act (12 U.S.C. 5901(7)), adding only the clarification that the term includes a person that, for compensation or profit, engages in the business in the United States of issuing payment stablecoins. Treasury reasoned that issuers and providers are overlapping rather than mutually exclusive categories — a permitted issuer redeeming its own coin is, functionally, exchanging digital assets for monetary value.

The statutory definition turns on being in the business, for compensation or profit, of activities like exchanging digital assets for monetary value or other digital assets, transferring digital assets, providing custodial services, or participating in financial services relating to the issuance or sale of a digital asset. The statute also carves out distributed ledger protocols themselves, developers of such protocols and of self-custodial software, self-custodial interfaces, validators and node operators, and participants in liquidity pools for peer-to-peer transactions.

And the rule text carries the statute's own rules of construction forward. Proposed § 1523.4(c) says the prohibitions do not apply to: the direct transfer of digital assets between two individuals acting on their own behalf and for their own lawful purposes, without the involvement of an intermediary; certain transfers by an individual between their own accounts at the same parent company; and any transaction by means of a software or hardware wallet that facilitates an individual's own custody of digital assets.

A restaurant that takes USDC for dinner is being paid for dinner. It is not in the business, for compensation or profit, of exchanging or custodying digital assets for other people. That is the plain reading, and it is the reading everyone in the market is working from — but Treasury has not said it in so many words, the comment period is precisely where that gets argued, and none of this is legal advice. If your business also sells stablecoins to customers, runs an exchange desk, or holds coins on behalf of third parties, you are in a different conversation and you should be having it with counsel.

The question in the rulemaking that is literally about merchant acceptance

Here is the part that did not make the headlines.

Treasury floated an alternative framework for deciding when a stablecoin is "issued in the United States," modelled on Regulation S and its concept of directed selling efforts — activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the US market for the coin. In listing what such activity could include, the proposal names: advertising or solicitation directed at the United States, liquidity incentives directed at US use, merchant-enablement activity in the United States, US-facing wallet or platform integrations, and other ecosystem-development activity intended to facilitate use or circulation of the coin in the US — even if the formal issuance happens offshore.

Then it asks outright, in Question 48, what conduct Treasury should identify as inconsistent with offshore treatment or as evidence of directed selling efforts — offering as examples advertising availability to US persons, advising people how to evade location detection, US-directed liquidity incentives, supporting US-facing wallet or platform integrations, or facilitating U.S. merchant acceptance.

Sit with that. In a rulemaking about offshore issuance, US merchant acceptance is on the list of things that might prove a foreign issuer is selling into America. Not because the merchant did anything wrong — the exposure runs to the issuer — but because merchant acceptance is now understood, at Treasury, as a distribution channel with regulatory weight.

The practical consequence is not a rule you must follow. It is a forecast: foreign issuers will get more careful about how visibly they court US merchant acceptance, and the payment products built around those coins will inherit that caution. If your acceptance stack is welded to one issuer's distribution strategy, you have taken on a risk you did not price.

The other rule closing this week: no, the issuer does not have to KYC you

A separate and much less discussed proposal answers the question merchants actually ask first.

On June 22, 2026, FinCEN together with the OCC, the Federal Reserve Board, the FDIC and the NCUA published a joint notice of proposed rulemaking on customer identification program requirements for permitted payment stablecoin issuers (91 FR 37234, docket FINCEN–2026–0101). It treats permitted issuers as financial institutions under the Bank Secrecy Act and requires them to maintain a CIP. Comments are due August 21, 2026 — two days after this post.

The scoping is the interesting part. The proposal defines an "account" as a formal relationship between a customer and the issuer established to provide services, dealings or transactions — including issuing or redeeming a payment stablecoin — and it is that relationship that triggers the CIP obligation. Exclusions cover products or services where no formal relationship is established, where activity occurs only through a smart contract, or where ownership or control of stablecoins occurs absent other indicators of a formal relationship. Secondary market participants — those who later transact in tokens without a direct relationship with the issuer — would not be considered the issuer's "customer" for CIP purposes. The agencies also declined to require collection of wallet identification numbers, and they specifically asked for comment on whether that scoping is right.

Translated: a business that receives USDC or USDT from a customer is a secondary-market holder. Accepting a stablecoin does not open a relationship with Circle or Tether, and under the proposal as written it does not put you inside the issuer's CIP perimeter. Your own obligations — the ones that come from your industry, your licences and your jurisdiction — are exactly what they were before. The rail changed; your file did not.

What this means for merchants accepting stablecoins today

Strip out the noise and four things are true.

• Nothing changes at your counter this week. The Treasury proposal is a proposal. Comments run to October 19, 2026, a final rule follows, and the operative prohibitions land on the Act's effective date and in July 2028.
• The regulation is aimed at the supply side. Issuance, offer and sale — issuers, exchanges, wallets, platforms that put coins in people's hands. Acceptance in exchange for goods and services is a different activity, and the drafting reflects that.
• Coin choice is becoming a live variable. Between GENIUS in the US, MiCA in Europe and issuer-licensing regimes in Hong Kong, the UAE and South Korea, the set of stablecoins that are comfortable in any given market will keep moving. A merchant who assumed that question was settled in 2024 has a re-read to do.
• Your real exposure is custody, not compliance trivia. When a coin's status shifts, the merchants who suffer are the ones whose funds are sitting in a third party's balance while that third party works out its own position. The merchants who shrug are the ones whose money already arrived.

We have written about that last point from the other direction: what happens when your crypto payment provider shuts down, and what Europe's USDT delisting did to businesses holding balances on platforms rather than in wallets.

How Payzum's model answers the question

Payzum is a non-custodial crypto payment processor. That is not a marketing adjective in this context — it is the specific property that determines what a rule change costs you.

The settlement is the payment. When your customer pays, the funds go directly to a wallet you control. Payzum never holds, pools or controls the money. There is no Payzum balance to be frozen, reclassified, or caught mid-transition while a provider revisits which coins it supports. On-chain finality means the payment is done: no chargebacks, no reversal window, no acquirer holding your cash for one to three days.

Crypto-only, with optional auto-convert. Payzum accepts crypto and settles in crypto, with optional automatic conversion to USDC or USDT for volatility protection — the two coins sitting at the centre of this rulemaking. Because that is a setting on payments landing in your own wallet, not a balance held on your behalf, changing which stablecoin you want to end up holding is a configuration decision, not a migration project. If you want the longer comparison, we wrote USDT vs USDC for payments in 2026.

Multi-chain by default. Bitcoin, Ethereum, Solana, Polygon, Base, Arbitrum, Optimism, BNB Chain and Avalanche, with typical confirmations around 0.4s on Solana and ~2s on Base and Polygon. Coin and chain are choices you keep making, not a bet you made once.

What Payzum does not do is equally load-bearing: no fiat settlement to a bank account, no promise about your regulatory position, and no legal advice. Payzum is not your compliance department. It is the part of the stack that makes sure a policy change is a settings change instead of a cash-flow event.

How it works, step by step

1. Connect your own wallet. You provide the receiving address. Payzum routes payments there directly — there is no intermediate balance, so there is nothing held between your customer paying and you being paid.
2. Choose how you get paid. Online: hosted checkout (redirect, modal or inline), no-code payment links and buttons, invoices with expiry and overpayment detection, recurring subscriptions, or a drop-in that works with your existing e-commerce plugins, snippets and webhooks. In person: a POS checkout that generates a fresh QR per sale, physical terminals, and PIN-protected cashier accounts with per-cashier and per-terminal analytics.
3. Set your settlement preference. Accept the coins and chains you want, and optionally auto-convert to USDC or USDT so what lands in your wallet is dollar-denominated.
4. Wire up the rest. REST API with API keys, signed webhooks and an integration playground for reconciliation; CSV mass payouts and EVM stablecoin payouts on Polygon, Arbitrum, Optimism, Base, BNB and Avalanche when you need to pay staff, suppliers or affiliates back out.

Concrete situations this rulemaking touches

Abstract regulation, specific consequences. Four shapes we see regularly:

• A US e-commerce store taking USDT from international buyers. The coin is issued offshore. Nothing in the proposal asks the store to stop accepting it, but the store's exposure changes depending on whether those USDT are sitting in a processor's balance awaiting payout, or already in the store's wallet. With non-custodial online acceptance, a headline about an issuer is news, not an operational incident.
• A LATAM or European exporter selling to US customers. Section 3 reaches offers and sales to persons located in the United States, and Question 48's list includes US-facing platform integrations. A seller whose buyers are American has a reason to read this even if the seller is not.
• A local business running a QR-based counter. Every sale generates a new QR; cashiers work under PIN accounts; funds land in the owner's wallet with on-chain finality and no chargebacks. Its regulatory surface is the same as any other cash-and-card business in its city — accepting a token did not add an issuer relationship, per the CIP proposal's scoping.
• A business paying contractors and affiliates back out in stablecoins. CSV mass payouts and EVM stablecoin payouts mean the outbound leg is also a choice of coin and chain you can revisit — see crypto mass payouts and paying affiliates in crypto.

Custodial balance vs non-custodial acceptance, when the rules move

Objections we hear

"I'm not in the US — why does this matter to me?"

Because the prohibitions are written around persons located in the United States, not around where the seller sits, and because the alternative framework Treasury floated treats US-facing wallet and platform integrations and merchant-enablement activity as signals. If any meaningful share of your customers is American, the coins available to them are shaped by this rule even though the rule never mentions you. The same logic ran the other way in Europe: read what MiCA meant for merchants.

"Should I stop accepting USDT?"

That is not a call we will make for you, and the proposal does not make it either. What it does is set out the conditions — a foreign issuer's technological capability and willingness to comply with lawful orders and any section 18 reciprocal arrangement, and from July 2028 the permitted-issuer requirement for offers and sales by digital asset service providers. Tether has been moving on the transparency side; we covered the KPMG audit and what it does and doesn't cover. The structural answer is to not be locked in: accept what your customers actually pay with, settle non-custodially, and keep the auto-convert target as a setting you can change.

"Do I need to file a comment?"

Most merchants won't. Trade associations and payment providers will. But if your business depends on a specific coin or corridor, the windows are real: August 21, 2026 for the joint CIP proposal and October 19, 2026 for Treasury's section 3 proposal, both through regulations.gov.