Treasury proposed rules on foreign payment stablecoin issuer licensing under GENIUS Act

On August 18, 2026, the U.S. Treasury issued a notice of proposed rulemaking setting out licensing and reserve requirements for foreign payment stablecoin issuers, such as Tether, that want to operate in the United States under the GENIUS Act. The proposal directly affects stablecoins USDT and USDC and is part of the broader federal push to bring crypto activity into a regulated framework.

What is happening

The Treasury's notice of proposed rulemaking (TREAS-DO-2026-0496-0001, RIN 1505-AC95, published in the Federal Register on August 18, 2026) interprets the foreign stablecoin issuer provisions of the GENIUS Act (12 U.S.C. section 5902). Under the statute, a foreign stablecoin issuer must register with the Office of the Comptroller of the Currency (OCC) and be subject to regulation comparable to the U.S. regime, while also demonstrating the technological ability and willingness to comply with lawful orders and reciprocal arrangements.

The proposed rules define what it means for a foreign issuer to "issue a payment stablecoin in the United States": issuing a stablecoin to persons located in the U.S. Digital asset service providers offering or selling such stablecoins would be subject to the same concept. The term "issue" would cover original issuance or reissuance, but not subsequent use of the token in commerce. A foreign issuer would also need to hold reserves in a U.S. financial institution sufficient to meet the liquidity demands of its U.S. customers, per 12 U.S.C. section 5916(a)(3).

The source article notes this proposal has particular relevance to Tether, the foreign issuer of USDT, which has a market capitalization cited at $183 billion. Tether has stated it has been audited by KPMG and that its stablecoin is backed by Treasury securities, bitcoin, and gold, though it has not released the KPMG report. The proposal runs alongside separate Financial Crimes Enforcement Network rules on anti-money-laundering procedures for payment stablecoin issuers, and parallel rules from the Federal Reserve, OCC, and FDIC.

Why it matters

For holders and traders of USDT and USDC, this rulemaking shapes the regulatory conditions under which the largest foreign stablecoin issuer can keep serving U.S. users. Licensing, reserve, and reciprocity requirements could affect how Tether structures its U.S. operations and reserves, which in turn has implications for market confidence in the stablecoin's backing and redemption capacity.

More broadly, the proposal is one piece of a wider regulatory effort - alongside SEC and CFTC rulemaking and the pending CLARITY Act in Congress - to formalize how crypto assets, including stablecoins, interact with the U.S. financial and banking system. Market participants should watch how the rule is finalized, how Tether and other foreign issuers respond, and whether the broader legislative process around crypto market structure advances or stalls, since all these threads affect the regulatory environment for USDT and USDC going forward.

Key details

• Date: August 18, 2026
• Project: U.S. Treasury / GENIUS Act
• Coins: USDT, USDC
• Category: Regulatory Deadline
• Status: Confirmed
• Source: taxnotes.com