The new regulations for cross-border remittances in the US in 2026: Cash payments will face a 1% withholding tax

Starting next year, the United States will take action against certain types of cross-border fund flows. According to the latest policy arrangements, from January 1, 2026, remittance service providers will be required to collect a 1% tax, but this policy does not apply equally to all transfer methods.

Which remittance methods will be taxed?

The new tax measures mainly target international remittances made using cash or physical payment tools. This means that if you transfer funds domestically or internationally using traditional cash methods, you will need to pay the corresponding tax. In contrast, direct transfers via bank accounts, debit cards, or credit cards are excluded from the taxation scope; these electronic payment channels are temporarily unaffected.

This is a major move by the Trump administration

The policy is an important part of the Trump administration’s “Big and Beautiful” tax reform plan, primarily targeting overseas remittance behaviors of U.S. citizens and residents. The tax reform covers a broad scope, but many questions remain regarding its specific implementation.

How will cryptocurrencies and stablecoins be treated?

Based on the current policy text, professional tax experts believe that cross-border transfers made using cryptocurrencies or stablecoins may not fall under taxable remittances. However, this judgment still awaits further clarification from regulatory authorities. Before the policy is officially implemented, there is uncertainty in how this sector will be handled, and industry players are generally awaiting official further explanations.

How this new regulation will impact the international remittance market remains to be seen.