US Treasury Proposes Rules Restricting Offshore Stablecoin Distribution

The US Treasury Department has proposed new rules for offshore stablecoins seeking access to American customers. The GENIUS Act would restrict payment stablecoin distribution in the United States, starting with a phase-in period from January 18, 2027. By July 18, 2028, only stablecoins issued by permitted or qualifying foreign issuers can be sold to US customers.

The rules apply to digital asset service providers, including exchanges, custodians, and companies that transfer digital assets. These businesses will need to check an issuer's legal status before offering a token in the United States. This includes verifying whether the issuer can comply with lawful US orders, such as seizing or freezing tokens.

Tether's USDT is one of the largest stablecoins affected by the proposal, with $183 billion in market capitalization. While Tether has launched federally regulated USA₮ and demonstrated compliance with US authorities, it still needs to decide whether to pursue qualifying foreign issuer status for USDT or direct more American use toward USA₮.