> Is auDA forcing registrars to implement IDN registrations?

basically, yes.

Registrars have been informed that the registry is being modified to handle 
IDNs. We don't have to offer this functionality, but if another registrar 
does, and they create a domain with IDN hostnames and that domain is then 
transferred by the registrant to us, our system will not be able to 
correctly handle that domain.

Regards,
Bennett.