New US Treasury Rule May Force Coinbase to Drop Tether

Crypto exchanges operating in the United States might soon have to drop Tether from their platforms. According to industry experts discussing the latest policy updates, newly proposed rules from the Treasury Department for the GENIUS Act mean foreign stablecoin issuers must comply with local legal orders. If they fail to do so, domestic platforms like Coinbase could be forced to remove the asset for American users.

The policy mirrors actions already taken in Europe. Under the European Union regulatory framework, local platforms had to remove noncompliant stablecoins or risk losing their operating licenses. Tether holds a massive share of the stablecoin market, but the company has kept USDT as an offshore token rather than pursuing direct domestic registration.

Tether is taking a two track approach by launching a separate domestic product called USAT to handle compliant onshore business. While the Treasury proposal is not yet final, it includes a comment window and a timeline stretching toward early 2027. Traders should watch how regulators handle foreign oversight as the proposal moves closer to a final decision.