Treasury proposal ties foreign stablecoin listings to exchange audits

Treasury's proposed rules under the GENIUS Act would require US exchanges and other digital-asset service providers to conduct due diligence on foreign-issued payment stablecoins. Providers could rely on a foreign issuer's representation about its ability and intent to comply with lawful US orders only after reasonable due diligence. Providers could face losing access to a foreign stablecoin if they know, have reason to know or should know that the representation is false or that the issuer cannot or will not comply. Treasury says the diligence should confirm that the issuer is not subject to a public GENIUS Act prohibition on secondary trading. That check would not be sufficient on its own. Platforms would also need to consider all reasonably available information about the issuer. The proposal does not identify qualifying tokens or decide whether USDT or another named stablecoin could remain available. Treasury expects the Act's general regime to take effect on Jan. 18, 2027, unless final implementing rules trigger an earlier date under the statute. A stricter offering limit would begin July 18, 2028. After that date, a covered provider generally could offer or sell a payment stablecoin to someone in the US only if the token came from a permitted US issuer or a foreign issuer meeting Section 18 requirements. A qualifying foreign issuer would need supervision under a regime Treasury finds comparable. The issuer would also need registration with the Office of the Comptroller of the Currency. The issuer would need sufficient reserves at a US financial institution for US customer liquidity unless a reciprocal arrangement provides otherwise. The issuer's jurisdiction could not be under comprehensive US sanctions or designated a primary money laundering concern. The issuer-level tests would apply alongside platform diligence over lawful-order compliance. The proposal is not a blanket ban on holding or directly transferring foreign stablecoins. Exemptions include certain direct transfers between individuals without an intermediary. Other exemptions cover certain same-parent transfers between an individual's US and foreign accounts. The exemptions also cover transactions through software or hardware wallets used for an individual's own custody. Treasury is considering whether to require written or regularly updated issuer representations, record retention, smart-contract review, or checks of seize, freeze and burn functions. Those possible requirements are not current mandates. Comments on the Federal Register proposal close Oct. 19, 2026. US availability will depend on categories and compliance evidence until Treasury finalizes the standard and regulators make issuer-specific decisions.