The GENIUS Act’s one-year rulemaking deadline expired on July 18, 2026, but the foreign payment stablecoin issuer regime — the provision that decides whether roughly $189 billion of offshore-issued USDT can lawfully reach US users — remains the least-finished part of the framework, six months before the statute takes effect on January 18, 2027.

Six federal agencies issued proposed rules under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act between September 2025 and April 2026, covering licensing, prudential standards, state-regime comparability, and Anti-Money Laundering (AML) obligations. The foreign-issuer piece, governed by 12 USC 5907 and 12 USC 5916, is the one where Treasury has published least and where the commercial stakes are highest. This analysis walks the statutory machinery, compares it to the Markets in Crypto-Assets Regulation (MiCA) and three Asian frameworks, and sets out what compliance teams face in the six months remaining.

Key Facts:

• The GENIUS Act was enacted July 18, 2025; most implementing regulations were required by July 18, 2026 — Morgan Lewis
• The statute takes effect January 18, 2027 — Morgan Lewis
• Six agencies issued proposals: Treasury (September 19, 2025 and April 3, 2026), FDIC (December 19, 2025 and April 10, 2026), NCUA (February 12, 2026), OCC (March 2, 2026), and Treasury FinCEN/OFAC (April 10, 2026) — Morgan Lewis
• State regimes may license issuers up to $10 billion outstanding before mandatory transition to federal oversight — Treasury proposal, April 3, 2026
• Tether’s USDT stood at approximately $189 billion in Q1 2026 and is issued offshore; no Treasury comparability determination has been made — Federal Register
• Comment periods closed May 1, June 2 and June 9, 2026 — Morgan Lewis

Methodology and sources

This analysis draws on the GENIUS Act as codified at 12 USC 5901 et seq., the seven notices of proposed rulemaking issued by Treasury, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) between September 19, 2025 and April 10, 2026, and the Federal Register implementation docket opened September 19, 2025. Cross-jurisdictional comparisons draw on MiCA Titles III and IV, the Monetary Authority of Singapore (MAS) stablecoin framework, and Japan Financial Services Agency (JFSA) payment-services rules.

The jurisdictional scope is deliberately narrow: US federal treatment of foreign issuers, compared against the four regimes most likely to be candidates for a comparability finding. State money-transmitter law is addressed only where the $10 billion federal-transition threshold engages it. The principal caveat is that Treasury’s foreign-issuer rules were unfinalised at the time of writing, so parts of this analysis describe a statutory framework whose operative detail does not yet exist.

What the foreign-issuer regime actually requires

The GENIUS Act does not ban offshore stablecoins from the US market. It conditions their access on a determination that the issuer’s home regulator is good enough. Under 12 USC 5907, a foreign payment stablecoin issuer (FPSI) may offer or sell into the United States only where the Secretary of the Treasury has determined that the issuer’s home regime is comparable to the requirements the Act establishes domestically, and only subject to further conditions layered on top.

Two structural features matter. First, the determination is regime-level, not firm-level: Treasury assesses a country’s regulatory and supervisory framework, and individual issuers then qualify by operating under it. An excellent issuer in a weak jurisdiction has no route through this door. Second, the Stablecoin Certification Review Committee — chaired by the Treasury Secretary under 12 USC 5903(a)(12) — requires each member to make a recommendation on whether a given foreign country’s regime is comparable. That is a multi-agency veto structure rather than a single administrative decision, and it is slower.

Treasury must also establish criteria for non-compliant foreign issuers to reach compliance, and criteria governing reciprocity requests under 12 USC 5916. Neither set of criteria has been finalised. How Treasury treats a regime deemed comparable, and what reciprocity means operationally — whether US issuers gain automatic access to the counterparty market, and on what terms — remains genuinely unresolved.

Why the domestic rules moved faster than the foreign ones

The domestic build-out is substantially complete in proposal form. The OCC published a comprehensive stablecoin framework on March 2, 2026. The FDIC addressed subsidiary approval procedures in December 2025 and prudential standards for permitted payment stablecoin issuers (PPSIs) in April 2026. FinCEN and the Office of Foreign Assets Control (OFAC) issued combined AML, Counter-Terrorist Financing (CTF) and sanctions requirements on April 10, 2026 — the rules this publication covered when FinCEN’s PPSI regime effectively turned stablecoin issuers into bank-like entities.

Treasury’s April 3, 2026 proposal on state regimes is the clearest signal of how comparability reasoning works in practice. It establishes that a state framework may differ “in form or procedure from the federal regulatory framework but still be substantially similar” — a deliberately permissive standard. States may license issuers holding up to $10 billion in outstanding stablecoins, above which transition to federal oversight becomes mandatory.

That domestic-comparability standard is the natural template for the foreign one, and its permissiveness cuts both ways. A “substantially similar” test applied to sovereign regulators is easier to satisfy than a line-by-line equivalence test, which speeds access for well-regulated jurisdictions. It also gives Treasury enormous discretion, and discretion exercised under political pressure is the thing compliance teams cannot plan around.

The $189 billion question

Tether’s USDT is the reason this provision has teeth. At roughly $189 billion outstanding in Q1 2026, USDT is the largest payment stablecoin in existence, and it is issued offshore. No Treasury comparability determination covers it. On the statute’s plain terms, absent such a determination, USDT cannot lawfully be offered or sold to US persons once the Act takes effect on January 18, 2027.

Tether’s response has been to route around the question rather than answer it. In January 2026 the company launched USAT, a US-domiciled, federally regulated token issued through Anchorage Digital with Cantor Fitzgerald oversight, built to satisfy GENIUS requirements directly rather than through a comparability finding.

“USDT has proven for more than a decade that digital dollars can deliver trust, transparency, and utility at a global scale. USAT extends that mission by providing a federally regulated product designed for the American market.”

— Paolo Ardoino, Chief Executive Officer, Tether (Tether)

The two-token structure is a rational hedge, but it does not dispose of the underlying issue. USDT’s dominance rests on network effects in offshore markets — remittance corridors, emerging-market dollar substitution, and exchange settlement rails — where US persons are present in ways that are difficult to police. A US-domiciled sibling token does not change USDT’s status; it simply gives Tether a compliant product to point at while the larger token’s position remains unresolved.

Congress has noticed. Senator Jack Reed moved on February 27, 2026 to tighten the foreign-issuer provisions, arguing that the current structure asks too little of offshore firms seeking US distribution.

“Right now foreign stablecoin issuers are able to operate on little more than a pinky promise. If foreign stablecoin issuers want the privilege of creating and handling the American people’s money, then they should open up their books for the American people to see.”

— Jack Reed, United States Senator for Rhode Island (US Senate)

How four other regimes handle the same problem

The comparability question only has an answer if there is something to compare against. Four frameworks are the realistic candidates for early determinations.

Jurisdiction	Instrument	Reserve requirement	Issuer form	Third-country access
United States	GENIUS Act, 12 USC 5901 et seq.	1:1 high-quality liquid assets	Permitted payment stablecoin issuer (PPSI)	Treasury comparability determination
European Union	MiCA, Titles III–IV	1:1 with segregated reserves	E-money institution or credit institution	No equivalence route; local authorisation required
Singapore	MAS stablecoin framework	1:1, low-risk assets, five-day redemption	MAS-regulated issuer	Bilateral, case-by-case
Japan	Payment Services Act, JFSA	1:1, trust or bank-issued	Trust bank or licensed remitter	Restrictive; domestic issuance preferred

Sources: GENIUS Act as codified; MiCA Titles III and IV; MAS stablecoin regulatory framework; JFSA Payment Services Act provisions. Compiled July 19, 2026.

The comparison exposes an asymmetry that will shape negotiations. MiCA has no third-country equivalence route for e-money tokens at all — a non-EU issuer wanting European retail distribution must authorise locally, typically through an EU-established e-money institution. The EU therefore has nothing to offer in a reciprocity trade, because it does not grant the thing it would be trading. Singapore and Japan operate closer to case-by-case bilateralism. The result is that the GENIUS Act’s reciprocity language, drafted as though equivalence were a two-way market, meets a world in which most counterparties do not run reciprocal regimes. The EU’s authorisation cliff, which this publication tracked as 210 firms cleared and 990 faced wind-down, illustrates how little appetite Brussels has for recognition shortcuts.

The enforcement backdrop compliance teams should assume

Firms weighing how aggressively to interpret the FPSI provisions should anchor on what happened the last time a large offshore crypto business treated US market access as a question of practical reach rather than legal permission. In November 2023, Binance Holdings agreed to pay approximately $4.3 billion across settlements with the Department of Justice, FinCEN and OFAC, and its founder pleaded guilty to a Bank Secrecy Act charge. The theory of the case was not that Binance lacked a licence in the abstract; it was that the firm served US persons while structuring itself to appear not to.

That precedent maps directly onto the January 18, 2027 problem. An offshore issuer whose token remains accessible to US persons through exchanges, wallets and bridges, absent a comparability determination, is running the Binance fact pattern with a stablecoin instead of an exchange. The FinCEN and OFAC proposals of April 10, 2026 supply the AML and sanctions architecture that would frame such a case.

What this means for issuers, exchanges and compliance teams

The operational implications differ sharply by stakeholder, and the six-month runway to January 18, 2027 is short for all of them.

Foreign issuers face a binary. Either their home regulator secures a comparability determination — a process requiring a recommendation from every member of the Stablecoin Certification Review Committee, with no published timetable — or they establish a US-regulated issuing entity, as Tether has done with USAT. The second route is slower and more expensive but does not depend on diplomatic sequencing outside the firm’s control. Firms waiting for the first route without building the second are accepting timeline risk they cannot mitigate.

Exchanges and wallet providers carry the distribution question. If an offshore token lacks a determination on January 18, 2027, continuing to offer it to US persons becomes a direct exposure rather than an issuer problem. Geofencing, US-person attestation and delisting logic all need to be built and tested before the effective date, not after it, and the practical difficulty is that the largest affected token is also the one most deeply embedded in settlement infrastructure.

State-licensed issuers should model the $10 billion threshold as an operational trigger, not a distant ceiling. Crossing it forces transition to federal oversight, and the transition is a licensing exercise with lead time. Issuers on a growth path that crosses $10 billion during 2027 should begin federal preparation now.

Compliance and legal teams should treat the unfinalised foreign-issuer rules as the highest-uncertainty item on the 2026 register. Where the domestic rules are now readable in proposal form and can be planned against, the FPSI criteria and reciprocity standards are not, and they govern the largest single exposure in the market.

The forward view: what is pending and what is contested

Three threads run into 2027. The first is whether Treasury issues final foreign-issuer rules before the January 18, 2027 effective date, or whether the regime goes live with the statutory obligation in force and the implementing detail still open. The second is whether any jurisdiction receives an early comparability determination, and which — Singapore and Japan are the most plausible first movers given the maturity of their frameworks and the absence of the EU’s structural obstacle.

The third is legislative. Reed’s February 2026 proposal signals appetite in the Senate to tighten the foreign-issuer route rather than let Treasury’s discretion settle it, and any amendment moving during 2026 would reset the compliance timetable. That tension — between an executive branch with broad discretion and a legislature that thinks the discretion was drafted too loosely — is the live question. It parallels the market-structure fight this publication covered in the CLARITY Act’s SEC-CFTC split, and the divergence dynamic visible in the FCA’s decision not to copy MiCA.

FAQ

What is the GENIUS Act deadline that just passed?

The GENIUS Act was enacted July 18, 2025 and required most implementing regulations to be promulgated within one year, by July 18, 2026. Six federal agencies issued proposed rules ahead of that date, with comment periods closing on May 1, June 2 and June 9, 2026. The statute itself takes effect January 18, 2027.

Can foreign stablecoin issuers operate in the United States?

Only where the Treasury Secretary determines the issuer’s home regulatory regime is comparable to GENIUS Act requirements, under 12 USC 5907, and subject to additional conditions. The determination is made at country level rather than firm level, and each member of the Stablecoin Certification Review Committee must make a recommendation. Treasury’s criteria remain unfinalised.

What happens to Tether’s USDT in January 2027?

No comparability determination currently covers USDT, which stood at approximately $189 billion in Q1 2026 and is issued offshore. Absent one, the statute’s plain terms bar offering or selling it to US persons from January 18, 2027. Tether launched USAT, a US-domiciled federally regulated token, in January 2026 as a parallel route into the market.

How does the GENIUS Act compare with MiCA?

MiCA has no third-country equivalence route for e-money tokens — a non-EU issuer must authorise locally through an EU-established entity. The GENIUS Act does provide a comparability route. That asymmetry weakens the Act’s reciprocity language, because the EU does not grant the recognition the US would be trading for.

What is the $10 billion threshold?

Treasury’s April 3, 2026 proposal permits state regimes to license payment stablecoin issuers holding up to $10 billion outstanding. Above that level, transition to federal oversight becomes mandatory. The proposal also establishes that a state framework may differ “in form or procedure” from the federal one while remaining “substantially similar”.

Which jurisdictions are most likely to receive early comparability findings?

Singapore and Japan are the most plausible first movers. Both operate mature 1:1 reserve regimes with defined issuer forms — MAS-regulated issuers with five-day redemption in Singapore, trust banks or licensed remitters under Japan’s Payment Services Act — and neither carries the structural obstacle the EU’s lack of an equivalence route creates.

This article is informational analysis only and is not legal, regulatory, compliance, or investment advice. Regulatory positions change and rules discussed here may be amended, delayed, or withdrawn. Firms should obtain advice from qualified counsel admitted in the relevant jurisdiction before taking any action in reliance on this analysis.