Treasury's 22 October 2026 COINS Act Proposal Adds Quantum Algorithms and Applications to the Outbound Investment Prohibition: What Section 851.226(j) Says Before 7 December

What Treasury proposed on 22 October 2026

On 22 October 2026 the US Treasury issued a notice of proposed rulemaking to implement the Comprehensive Outbound Investment National Security Act, the COINS Act, which Congress passed in the Fiscal Year 2026 National Defense Authorization Act. The proposal rebuilds the Outbound Investment Security Program that has applied since 2 January 2025 under 31 C.F.R. Part 850. It covers six technology sectors, adds Cuba, Iran, North Korea, Russia and Maduro-era Venezuela to China as countries of concern, and keeps comments open until 7 December 2026.

Why the quantum line moves to software

The existing rule already prohibits US investment in covered companies that build quantum computers and their critical components, and in quantum sensing and networking limited by military, intelligence, mass-surveillance or other specified end uses. The proposal would add the development of quantum algorithms and applications; its preamble promises an end-use limitation for that clause, which the draft rule text does not visibly carry. In AI the notification tier disappears: any covered investment in a company developing what the proposal now calls a super intelligence system would be prohibited. The obligation to classify each deal sits with the investor, under a reasonable and diligent inquiry standard and without a Treasury list of covered companies. Nothing changes until a final rule sets an effective date. This post reads the proposal closely and asks where a quantum software company would fall.