Treasury Proposal Targets Stablecoins on US Exchanges

The US Treasury has proposed new guidance that could significantly impact which stablecoins are listed on cryptocurrency exchanges serving American customers.

The proposal, part of the GENIUS Act set to enter into force on January 18, 2027, extends beyond US-based stablecoin companies and applies to foreign issuers seeking entry into the American market.

Issuers from outside the US must demonstrate their ability to comply with US legal orders, such as freezing or seizing stablecoins when required. Exchanges will be required to conduct their own checks on issuers' capabilities instead of relying solely on issuer statements.

The proposal takes a broad approach to defining what constitutes issuing stablecoins in the US, considering any transaction where either the issuer or recipient is based within the country. Foreign issuers may need to implement controls blocking their stablecoins from reaching American users to avoid regulatory issues.

Crypto exchanges could be forced to reconsider listings of stablecoins whose issuers do not meet GENIUS Act requirements starting July 18, 2028.