The U.S. Treasury Department published an interim final rule on September 30, 2026 (Federal Register 2026-19966), establishing the first binding regulation under the GENIUS Act. The rule creates a procedural framework for the Stablecoin Certification Review Committee (SCRC) — composed of the Trea...
"Implementing the GENIUS Act is essential to securing American leadership in digital assets. Stablecoins will expand dollar access for billions across the globe and lead to a surge in demand for U.S. Treasuries, which back stablecoins." — Scott Bessent, U.S. Treasury Secretary
The U.S. Treasury Department published an interim final rule on September 30, 2026 (Federal Register 2026-19966), establishing the first binding regulation under the GENIUS Act. The rule creates a procedural framework for the Stablecoin Certification Review Committee (SCRC) — composed of the Treasury Secretary, Federal Reserve Chair, and FDIC Chair — to evaluate whether state-level stablecoin regulatory regimes are "substantially similar" to federal standards. The rule took effect immediately upon publication.
The regulation draws a hard line at $10 billion in consolidated outstanding stablecoin issuance. Issuers below that threshold may opt for state-level supervision; those above it are categorically excluded from the state pathway and must operate under federal oversight via the Office of the Comptroller of the Currency (OCC). Tether (~59% of the $308 billion stablecoin market) and Circle (~23%) both exceed the cap. Circle secured an OCC national trust bank charter in December 2025. Tether, domiciled outside the United States, faces a more complex compliance path.
The rule arrives against a stablecoin market that grew 14.3% year over year to approximately $308 billion as of August 2026, with Treasury Secretary Scott Bessent projecting growth to $3 trillion by 2030. Comments on the interim rule are due by November 30, 2026.
The interim final rule (Docket TREAS-DO-2026-0232) establishes two things: the certification form that state regulators must submit and the review process the SCRC will follow to approve or deny those certifications. It does not define the substantive criteria for "substantial similarity" — those were proposed separately in April 2026 and remain in proposal stage.
The rule is effective immediately, but the Treasury cannot begin accepting state certifications until the Office of Management and Budget (OMB) completes the Paperwork Reduction Act approval process. State regulators have until January 18, 2028 — one year from the GENIUS Act's effective date — to submit certifications.
The July 18, 2026 statutory deadline for seven federal agencies to finalize rulemaking was missed. The OCC has committed to publishing its final implementing rule by November 2026.
The GENIUS Act's central structural feature is the $10 billion consolidated issuance cap for the state pathway. Issuers at or below that figure can seek state-level regulation, provided their home state's regime passes the SCRC's "substantially similar" test. Issuers exceeding the cap must transition to federal OCC supervision within 360 days, unless they obtain a specific waiver under Section 4(d)(3) of the statute.
This creates a two-tier market. Small and mid-sized issuers — including bank subsidiaries, state-chartered trust companies, and new entrants — can operate under state regimes. The two dominant issuers, which together control approximately 82% of outstanding stablecoin supply, are locked into the federal track.
According to reporting by Forkast, states with pre-existing prudential stablecoin regimes in place before January 14, 2026 may benefit from an expedited certification timeline.
The GENIUS Act defines three classes of entity permitted to issue a payment stablecoin:
Subsidiary of an insured depository institution. Banks and credit unions can issue stablecoins through subsidiaries, subject to their existing prudential regulator. JPMorgan Chase is already offering deposit tokens on a privacy-enabled public blockchain. According to a recent report, Fiserv has activated a stablecoin platform for approximately 10,000 banks with 400-millisecond settlement times.
Federally qualified nonbank issuer. Nonbank firms supervised by the OCC. Circle, Paxos, and three other nonbank firms received conditional OCC national trust bank charters in December 2025.
State-qualified issuer. Entities with consolidated outstanding issuance of $10 billion or less, supervised by a state regulator whose regime has been certified as "substantially similar" to federal standards.
Tether (USDT): Holds approximately 59% of stablecoin supply. Domiciled outside the United States. Exceeds the $10 billion threshold by a wide margin. Tether has historically faced scrutiny over reserve composition transparency. The GENIUS Act's Section 4(c) limits the state pathway to U.S.- or state-organized issuers, further restricting Tether's options. Under the foreign issuer framework (discussed below), Tether would need to demonstrate technological capability to comply with lawful U.S. orders and establish reciprocal arrangements.
Circle (USDC): Holds approximately 23% of stablecoin supply. Already on the federal track via its December 2025 OCC charter. Circle has piloted a mechanism to reverse fraudulent or hacked transactions on a layer above the permissionless blockchain, according to Brookings Institution analysis. Circle's position appears structurally advantaged: it is U.S.-domiciled, federally chartered, and compliant with the emerging framework.
The contrast between the two largest issuers is notable. Circle's proactive regulatory engagement positions it as the default institutional-grade stablecoin under the GENIUS Act. Tether's path to U.S. market access depends on the foreign issuer rules still being finalized.
State regulators and the American Bankers Association (ABA), along with 52 state bankers associations, have raised concerns about compressed timelines. No federal regulator has finalized its own GENIUS Act implementing rules, creating uncertainty about what "substantially similar" means in practice before the January 2028 certification deadline.
Treasury addressed this partially in the interim rule by clarifying that state regulators can submit conditional certifications — forms that acknowledge planned state legislative or regulatory work not yet completed. This accommodation does not guarantee approval but opens a pathway for states still building their frameworks.
The Bank of North Dakota's Roughrider Coin initiative has been cited as an example of state-level stablecoin activity that would fall under this pathway.
The GENIUS Act mandates 1-to-1 reserve backing for all payment stablecoins. Permissible reserve assets are:
The statute explicitly prohibits stablecoin issuers from paying interest to holders. Brookings analysis flags a concern: affiliate-paid rewards could circumvent this restriction, and community banks fear such arrangements could drain deposits, with one estimate suggesting a potential $850 billion reduction in lending capacity.
Stablecoin issuers do not receive automatic Federal Reserve access or deposit insurance. This distinction — between stablecoins and tokenized bank deposits — is structural. Tokenized deposits carry deposit insurance, access to the lender of last resort, and AML/CFT safeguards at issuance. Stablecoins are bearer instruments where secondary-market transactions cannot easily be tracked in real time by the issuer.
A separate Treasury proposal published August 18, 2026, with comments due October 19, 2026, addresses foreign payment stablecoin issuers (FPSIs). The rule creates a new category: Digital Asset Service Providers (DASPs), defined as U.S.-facing businesses exchanging digital assets for value or providing custody and issuance services.
DASPs cannot offer FPSI stablecoins unless the foreign issuer demonstrates technological capability to comply with lawful U.S. orders and maintains reciprocal arrangements. A safe harbor exists for issuers who reasonably believe their counterparty is outside the U.S., have implemented controls preventing U.S. issuance, and do not engage in U.S.-directed advertising.
The effective date for the DASP restriction is July 18, 2028 — three years after the GENIUS Act's enactment.
Penalties under the GENIUS Act are substantial:
From January 18, 2027, any entity issuing a payment stablecoin without authorization is operating outside the law. The enforcement framework applies to both domestic and foreign issuers serving U.S. customers.
The stablecoin market stands at approximately $308 billion as of August 2026, up 14.3% year over year from $269.4 billion. USDT and USDC together represent approximately 82% of supply. Industry projections, including from Citigroup and Treasury Secretary Bessent, suggest potential growth to $420 billion before year-end 2026 and $3 trillion by 2030.
An EY survey of 350 companies found only 13% currently use stablecoins, but over 50% of non-users expect adoption within 6-12 months. Companies anticipate stablecoins comprising 5-10% of cross-border payments by 2030, representing $2.1-$4.2 trillion in volume.
The regulatory framework is arriving alongside institutional adoption. Citi announced stablecoin integration with its $6 trillion daily payment stack. Neobanks are issuing stablecoins to 600 million users. The GENIUS Act provides the legal scaffolding for this expansion — but also sets boundaries that will reshape market structure.
Treasury published its first binding GENIUS Act rule on September 30, 2026. The interim final rule establishes the SCRC's procedural framework for evaluating state stablecoin regimes. Comments are due November 30.
The $10 billion threshold creates a two-tier market. Small issuers can pursue state regulation; Tether and Circle — controlling ~82% of supply — must operate under federal OCC supervision.
Circle is structurally positioned for the federal framework. Its December 2025 OCC charter, U.S. domicile, and proactive compliance work place it ahead of competitors.
Tether faces the most complex path. As a non-U.S. entity exceeding $10 billion in issuance, it must navigate the foreign issuer framework with a July 2028 compliance deadline.
Key deadlines remain outstanding. The OCC's implementing rule (expected November 2026), the substantive "substantially similar" criteria, and the foreign issuer rules are all pending finalization.
Community banks face deposit displacement risk. Brookings estimates potential $850 billion lending capacity reduction if stablecoin-adjacent rewards circumvent the interest payment prohibition.
Reserve requirements exclude riskier assets but allow uninsured bank deposits and repo — categories that demonstrated vulnerability during the 2023 regional banking crisis.
The Treasury's interim final rule is procedural, not substantive. It builds the bureaucratic machinery — forms, review processes, appeals — that will operationalize the GENIUS Act's two-tier regulatory structure. The substantive questions — what "substantially similar" means, how foreign issuers will be treated, whether the interest payment prohibition will hold — remain open.
What the rule does accomplish is clarity on market structure. Issuers above $10 billion are federal entities. Issuers below are state entities, pending certification. The 82% of the market controlled by Tether and Circle falls into the federal bucket. The remaining 18% — and every new entrant targeting the sub-$10 billion space — gets the state pathway.
The comment period closes November 30. The OCC's implementing rule is expected in November. The GENIUS Act's effective date is January 18, 2027. Between now and then, the regulatory architecture for a $308 billion market — projected to grow tenfold by decade's end — is being assembled in real time.