Treasury Stablecoin Rules Hit Offshore Issuers, U.S. Exchanges in 2027

Treasury declined to model the rule on securities law, arguing that traditional investment rules "may frustrate" what payment stablecoins do. It proposed a conduct test for offshore issuance: an issuer outside the U.S. is treated as not having issued here if it reasonably believes its buyers are abroad, keeps controls that "must not only be adopted on paper, but actually implemented," and does no marketing aimed at U.S. persons.

Criminal exposure reaches past the issuer. Acting as a market maker for a newly issued unlawful stablecoin, supplying a brand in a white-label deal, or coordinating minting or customer solicitation could each count as participating in an unlawful issuance. Knowing participation carries a fine of up to $1 million for each violation, five years in prison, or both.

One softer path did not survive. Treasury weighed a longer runway, illustrated as "36 months," alongside a carve-out for offshore tokens below a de minimis size of "less than $1 billion in U.S.-held capitalization." It set the idea aside because the delayed consumer protection would cost more than the eased transition saved. Circle had urged Treasury to apply identical requirements regardless of issuer type, an argument live since Congress passed the law last year.

The department posed 87 questions and set a 60-day comment window from Tuesday's publication. Treasury Secretary Scott Bessent said the department wants to "provide the regulatory certainty businesses need to innovate and grow in America, cement the role of the U.S. dollar as the world's reserve currency, and keep America the crypto capital of the world."