Three federal agencies — the Treasury Department, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) — are simultaneously advancing rulemaking to implement the GENIUS Act, the stablecoin law signed on July 18, 2025. The statutory deadline for...
"I just want to make sure that we get these done on time. We've seen instances across years in this committee where sometimes bills are passed, [but] we don't see the regulations come out on time." — Rep. Bryan Steil (R-Wis.), Chair, House Financial Services Committee
Three federal agencies — the Treasury Department, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) — are simultaneously advancing rulemaking to implement the GENIUS Act, the stablecoin law signed on July 18, 2025. The statutory deadline for final regulations is July 18, 2026 — 104 days from today. The FDIC will vote on its proposed rule at a public board meeting on April 7. The OCC published a 376-page proposed rule with a comment period closing May 1. The Treasury issued its own 87-page notice of proposed rulemaking on April 1, establishing how it will certify state-level regulatory regimes as "substantially similar" to the federal framework.
The stakes are measured in hundreds of billions of dollars. The stablecoin market now stands at $311 billion. Tether and Circle collectively hold more than $190 billion in U.S. Treasury bills as reserve assets. Standard Chartered estimates that if stablecoin issuers are permitted to offer yield, $500 billion in deposits could migrate out of the banking system by 2028. Banks are lobbying to close that possibility. The regulatory architecture being finalized in the next 104 days will determine whether stablecoins remain a payments instrument — or evolve into a deposit substitute that competes directly with the banking sector.
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) passed the Senate 68-30 on June 17, 2025, cleared the House 307-122, and was signed into law on July 18, 2025. The statute requires implementing regulations to be promulgated within one year — setting a hard deadline of July 18, 2026.
Three primary federal regulators are running parallel rulemaking processes:
| Agency | Document | Pages | Comment Deadline | |--------|----------|-------|-----------------| | Treasury | NPRM on state-regime equivalence | 87 | 60 days post-Federal Register publication | | OCC | Proposed rule for national bank stablecoin issuance | 376 | May 1, 2026 | | FDIC | Proposed rule for FDIC-supervised issuers | TBD (vote April 7) | TBD |
The National Credit Union Administration (NCUA) has also submitted its own rulemaking to the Office of Management and Budget for review. The Federal Reserve has yet to publish its proposed rule, though staff work is reported to be underway.
The law takes effect on the earlier of two dates: 18 months after enactment (January 18, 2027) or 120 days after final regulations are published. If all agencies finalize rules by July 2026, the operational framework could be live by November 2026 — five months ahead of the statutory backstop.
The OCC's proposed rule, published in February 2026, is the most detailed regulatory framework issued to date. It covers how OCC-supervised entities — national banks, federal thrifts, federally licensed nonbank issuers, and foreign issuers operating in the U.S. — may issue, redeem, and manage payment stablecoins.
Key provisions:
The FDIC's board of directors will convene on April 7, 2026, under a Sunshine Act notice, to consider a Notice of Proposed Rulemaking establishing GENIUS Act requirements and standards for FDIC-supervised permitted payment stablecoin issuers.
The agenda includes:
In a March 2026 address at the American Bankers Association Washington Summit, FDIC Chairman Travis Hill stated the agency will propose that payment stablecoins under the GENIUS Act are not eligible for pass-through deposit insurance. "We should answer this question definitively by regulation, rather than waiting until a bank that holds stablecoin reserves fails, when different parties may have different expectations on the availability of FDIC insurance," Hill said.
Hill drew a sharp distinction between stablecoins and tokenized deposits. Tokenized deposits — conventional bank liabilities recorded on blockchain — would likely be treated as standard deposits eligible for FDIC insurance. This creates a two-tier system: bank-issued tokenized deposits carry government insurance; nonbank-issued stablecoins do not.
The Treasury's April 1 NPRM addresses a specific question: how does the federal government determine whether a state's stablecoin regulatory framework is "substantially similar" to the federal one?
This matters because the GENIUS Act allows issuers with less than $10 billion in outstanding stablecoins to opt for state-level regulation — but only if their state's regime meets federal standards. The Treasury's proposal distinguishes between:
The Conference of State Bank Supervisors (CSBS) has urged Treasury to adopt flexible standards, arguing that "unrealistically short" certification timelines could effectively force smaller issuers into the federal framework by default.
The stablecoin market has reached $311 billion in total capitalization as of early April 2026. Two issuers dominate:
| Stablecoin | Issuer | Market Cap | Market Share | |-----------|--------|-----------|-------------| | USDT | Tether | $184B | 59.2% | | USDC | Circle | $77.3B | 24.8% | | All others | Various | $49.7B | 16.0% |
USDT and USDC together account for 84% of the market. USDT's daily trading volume exceeds $75 billion. Circle went public on the New York Stock Exchange in June 2025, providing the first publicly audited window into a major stablecoin issuer's operations.
The $10 billion threshold in the GENIUS Act — below which issuers can opt for state regulation — means that Tether and Circle are definitively subject to federal oversight. The state-level pathway applies to the long tail of smaller issuers that constitute the remaining 16% of market share.
The GENIUS Act explicitly prohibits issuers from paying yield directly to stablecoin holders. But the law's text leaves ambiguity around indirect yield — payments made by affiliates, partners, or third-party platforms that distribute stablecoins.
The banking industry, represented by the Bank Policy Institute (BPI), American Bankers Association, Consumer Bankers Association, Financial Services Forum, and The Clearing House, submitted joint recommendations to Treasury demanding that the yield prohibition be interpreted broadly — covering both direct and indirect payments.
The banks' concern is quantified. Standard Chartered estimates that if stablecoins are permitted to offer yield, up to $500 billion in deposits could migrate from U.S. banks to stablecoin products by 2028. Geoffrey Kendrick, the bank's global head of digital assets research, identified U.S. regional banks as the most exposed, given their reliance on deposit-driven net interest margin income.
The interest rate gap is the core mechanism. U.S. banks pay an average of 0.1% on savings deposits. Stablecoins backed by short-term Treasuries yielding approximately 4% could offer substantially higher returns to holders — if the regulatory framework permits it. The GENIUS Act's yield ban was a concession to banks during the legislative process. What the agencies decide in the rulemaking process about indirect yield mechanisms will determine whether that concession holds.
In March 2026, President Trump weighed in publicly, stating: "The Genius Act is being threatened and undermined by the Banks, and that is unacceptable." The comment added political pressure to a process already marked by intense lobbying from both sides.
The GENIUS Act creates a dual regulatory architecture. Issuers above $10 billion in outstanding stablecoins must register with and be supervised by a federal regulator (OCC, FDIC, or Federal Reserve). Issuers below $10 billion can choose state-level supervision — if their state's framework is certified as "substantially similar" by Treasury.
This creates competitive dynamics:
States as regulatory competitors: States that move quickly to establish GENIUS Act-compliant frameworks can attract issuers. States that delay risk losing issuers to federal supervision or to other states.
The CSBS lobbying effort: State regulators are fighting to preserve discretion. Their comment letter to Treasury argued that state frameworks should not be required to mirror federal implementing regulations word-for-word to qualify as "substantially similar."
The $10 billion cliff: Issuers approaching the $10 billion threshold face a structural transition from state to federal oversight — with associated compliance costs. This could create incentives for issuers to cap their growth just below the threshold or to spin off separate entities.
Currently, only Tether ($184B) and Circle ($77.3B) clearly exceed the federal threshold. The next-largest stablecoins — FDUSD, DAI/USDS, and others — fall well below $10 billion, making the state-vs-federal question directly relevant to dozens of active issuers.
One dimension of the GENIUS Act that has drawn less public attention is its structural impact on U.S. sovereign debt markets. By mandating that stablecoin reserves consist of U.S. dollars and short-term Treasuries (93 days or less), the law creates a permanent, growing buyer of government paper.
The numbers are already significant. Tether held more than $127 billion in U.S. Treasury debt as of its June 2025 reserve report audited by BDO. Between June 2024 and June 2025, Tether and Circle combined purchased $56.6 billion in new Treasury holdings. According to Fortune, if stablecoin issuers were a sovereign nation, they would represent the sixth-largest source of new demand for U.S. Treasuries — exceeding Japan, Singapore, and Norway over that period.
Apollo Global Management estimates that stablecoins are collectively the 18th-largest external holder of U.S. Treasuries and projects the sector could reach $2 trillion in market capitalization by 2028. At that scale, the sector's mandatory Treasury purchases would constitute a material source of demand in every short-term auction cycle.
The rehypothecation ban in the OCC's proposed rule limits the velocity of these assets. Reserves held by stablecoin issuers cannot be lent out, pledged, or otherwise circulated — except through approved repo transactions. This creates a structural lockup of Treasury supply, potentially tightening short-term money markets as the stablecoin sector grows.
The 104 days between now and July 18 will determine the operating framework for a $311 billion market. The regulatory choices being made — on yield, on insurance eligibility, on state-federal equivalence, on capital and redemption standards — will shape whether stablecoins remain narrowly defined payment instruments or become competitive alternatives to bank deposits.
The convergence of three simultaneous rulemakings, aggressive lobbying from both banks and crypto firms, and explicit presidential commentary makes this the most consequential financial regulatory process currently underway in the United States. The outcomes will reverberate through Treasury markets, banking competition, and the structure of dollar-denominated digital payments for years.