US Treasury Moves to Tighten Oversight of Offshore Stablecoin Issuers

The US Treasury is moving to identify and regulate the overseas entities behind payment stablecoins used by Americans, giving foreign issuers a runway of roughly nine months to meet US standards. On April 8, 2026, the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) issued a proposed rule that would require digital asset service providers (DASPs) to stop offering foreign-issued payment stablecoins unless the issuers satisfy stringent registration and compliance requirements. The restrictions are scheduled to be fully in force on January 18, 2027. The public comment period runs through June 9, 2026. Under the proposal, permitted payment stablecoin issuers (PPSIs) would be treated as financial institutions under the Bank Secrecy Act, aligning them with banks, money transmitters, and broker-dealers for anti-money laundering obligations. That would bring customer due diligence, suspicious activity reporting, and other AML controls squarely into the stablecoin issuance model. Foreign issuers would face additional hurdles. They would be required to register with the Office of the Comptroller of the Currency (OCC) and hold reserves at US institutions. Stablecoins from issuers that fail to meet those conditions could not be listed by US-based exchanges and platforms. Treasury Secretary Scott Bessent described the proposal as a national security measure aimed at shielding the financial system from potential threats. The proposal also serves as the enforcement layer for the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), signed into law on July 18, 2025. The GENIUS Act established the first comprehensive federal framework for payment stablecoins, replacing a prior mix of state-level rules and informal federal guidance with clear definitions covering what qualifies as a payment stablecoin, who may issue one, and the obligations attached. No specific tokens or issuers are singled out. The framework applies broadly to payment stablecoins and their issuers as a category. Market implications skew in favor of US-domiciled issuers already operating under domestic oversight. If offshore competitors fail to secure OCC registration, domestic players could capture share by default as access to US platforms narrows. For major offshore issuers, compliance could be costly and operationally complex, requiring legal and compliance infrastructure and ongoing submission to US jurisdiction. Exchanges and platforms listing foreign-issued stablecoins would also face a compliance lift, needing to review their lineups and confirm that each issuer meets the new standards ahead of the January 2027 deadline.