Treasury rule would force US exchanges to vet foreign stablecoins

The Treasury proposed a GENIUS Act rule that would require U.S. exchanges and other digital-asset service providers to verify foreign stablecoin issuers’ claims that they can comply with lawful U.S. orders. Platforms must perform “reasonable due diligence” before relying on an issuer’s representation that it can freeze, seize or otherwise respond to legal requests; failure to meet the standard could lead to delisting when stricter rules take effect on July 18, 2028.

Under the draft rule, a U.S. provider may accept a foreign issuer’s statement about its technology and intent to comply only after carrying out checks that at minimum show the issuer is not subject to a public GENIUS Act prohibition on secondary trading. Treasury says that confirmation alone is not sufficient; platforms must consider all reasonably available information and may not rely on representations when they know, have reason to know or should know the statements are false or that the issuer cannot or will not comply.

The proposal sets two key dates. Treasury expects the law’s general regime to take effect on Jan. 18, 2027, unless final implementing rules change that date. A stricter offering limit starts July 18, 2028, after which a covered provider generally could offer or sell payment stablecoins to U.S. customers only if the token comes from a permitted U.S. issuer or from a foreign issuer that meets Section 18 requirements.

Section 18 would require a foreign issuer to be supervised under a regime Treasury finds comparable to U.S. supervision, to register with the Office of the Comptroller of the Currency, and to hold sufficient reserves at a U.S. financial institution to ensure liquidity for U.S. customers unless a reciprocal arrangement applies. The issuer’s jurisdiction must not be subject to comprehensive U.S. sanctions or be designated a primary money-laundering concern.

Even when a foreign issuer meets those conditions, exchanges and other platforms would still need to show they conducted adequate diligence about lawful-order compliance before listing or continuing to offer the stablecoin. Treasury is asking whether the final rule should require written or regularly updated issuer representations, specific record-retention policies, smart-contract reviews, or checks of token functions such as seize, freeze and burn. Those items are posed as questions for public comment, not current mandates. Comments on the proposed standard are open through Oct. 19, 2026.

The proposal does not name approved tokens and does not decide whether specific widely used stablecoins, such as USDT, can remain available to U.S. users. The draft does not ban holding or directly transferring foreign stablecoins; exemptions include lawful direct transfers between individuals without an intermediary, certain same-parent transfers between an individual’s U.S. and foreign accounts, and transactions processed through software or hardware wallets used solely for an individual’s custody.

Until Treasury finalizes the standard and regulators make issuer-specific determinations, availability of foreign stablecoins to U.S. customers will depend on issuer categories and the evidence platforms can present about compliance rather than on a published list of approved foreign tokens.