Treasury proposes GENIUS Act rules for US exchanges auditing foreign stablecoins

Treasury's proposed rules under the GENIUS Act would allow US exchanges to offer foreign-issued payment stablecoins if they can justify their trust in the issuer's compliance with US laws. Providers must conduct reasonable due diligence to verify the issuer's capability to comply with lawful orders, such as freezing or seizing tokens. Reliance on issuer representations is prohibited if the platform knows or should know the information is false. The minimum diligence requirement includes confirming the issuer is not subject to a public prohibition under the GENIUS Act. The proposal shifts the responsibility of access decisions to businesses that list or sell stablecoins to US customers. The effective date for the Act is set for Jan. 18, 2027, with stricter limits starting July 18, 2028. From that date, providers can only offer payment stablecoins from permitted US issuers or qualifying foreign issuers meeting specific requirements. Exemptions include lawful direct transfers between individuals and certain transactions through personal wallets. The adequacy of platform diligence remains undefined, with Treasury seeking input on potential requirements. Comments on the proposal are due by Oct. 19, 2026.