The U.S. Department of the Treasury on September 30, 2026 published its first binding regulation under the GENIUS Act (P.L. 119-27), an interim final rule (Federal Register 2026-19966) that establishes the procedural machinery for the Stablecoin Certification Review Committee (SCRC). The rule dra...
"The $10 billion threshold is the structural fault line. Above it, you're federal. Below it, you're state — if your state can prove it." — Cited characterization of the GENIUS Act's bifurcated framework, Forkast News analysis, October 2026
The U.S. Department of the Treasury on September 30, 2026 published its first binding regulation under the GENIUS Act (P.L. 119-27), an interim final rule (Federal Register 2026-19966) that establishes the procedural machinery for the Stablecoin Certification Review Committee (SCRC). The rule draws a hard line at $10 billion in outstanding issuance: stablecoin issuers above that threshold must operate under federal supervision; those below may opt for state-level regulation, provided their state's regime passes a "substantially similar" test.
The rule lands in a $314 billion stablecoin market dominated by two issuers — Tether ($183.3 billion) and Circle ($73.7 billion) — that together control 81.7% of total supply. Both exceed the $10 billion cap and are locked into the federal pathway. Below them, a growing cohort of smaller issuers, bank-chartered entrants, and at least one state government (Wyoming) are positioning for the state-regulated tier. Public comments close November 30, 2026.
Federal Register 2026-19966, effective upon publication on September 30, 2026, establishes the forms and procedures for state regulators to submit certification applications to the SCRC. The committee is chaired by the Treasury Secretary and includes the Chair of the Federal Reserve Board of Governors and the Chair of the FDIC. Unanimous approval is required for certification.
The rule arrived 74 days past the statutory deadline of July 18, 2026, which seven federal agencies missed. It is procedural — it sets up the application pipeline — but the substantive criteria for what constitutes a "substantially similar" state regime remain in proposal stage, having been published as an NPRM in April 2026 under docket TREAS-DO-2026-0232.
Treasury will not accept state certifications until the Office of Management and Budget completes a Paperwork Reduction Act review. Comments on the interim final rule are due by November 30, 2026. The initial deadline for states to submit certifications is January 18, 2028 — one year after the GENIUS Act's effective date of January 18, 2027.
The GENIUS Act creates a binary regulatory structure. The dividing line is $10 billion in consolidated outstanding payment stablecoin issuance:
Above $10 billion: Issuers must register as Permitted Payment Stablecoin Issuers (PPSIs) under federal supervision — either through the OCC, the FDIC, or the Federal Reserve. No state pathway is available. Issuers that cross the threshold while operating under a state regime have 360 days to transition to federal oversight or halt net new issuance, unless they obtain a waiver under Section 4(d)(3).
At or below $10 billion: Issuers may operate under state regulation if: (a) the state submits a certification application, (b) the state attests its regime is "substantially similar" to federal standards, and (c) the SCRC unanimously approves the certification. Annual recertification is required, with the committee retaining power to revoke based on material changes.
As of September 2026, only two stablecoin issuers exceed $10 billion — Tether and Circle. No other stablecoin in circulation surpasses that mark.
The OCC has moved aggressively on federal chartering. On December 12, 2025, it granted conditional approvals to five entities simultaneously: Circle (filing as First National Digital Currency Bank), Ripple, Paxos, BitGo, and Fidelity Digital Assets. Three more followed in February 2026: Bridge (Stripe's stablecoin infrastructure subsidiary), Protego, and Crypto.com.
Circle received final approval on July 8, 2026, becoming the first stablecoin issuer to hold a full OCC national trust bank charter. The charter is limited: Circle National Trust cannot accept deposits, extend loans, or carry FDIC insurance. Its scope is restricted to fiduciary custody and reserve management for the $73.2 billion USDC supply.
World Liberty Financial, linked to the Trump family, received conditional approval for World Liberty Trust Company, with a $20 million minimum capital requirement and a mandate to comply with the GENIUS Act. The entity plans to issue and redeem USD1, taking over from BitGo as the token's custodian.
The OCC has committed to publishing its final PPSI rule by November 2026, with applications for the dedicated stablecoin charter expected to open in early 2027.
The state pathway is not yet operational. Treasury has published the procedural rules but not the substantive standards. States can submit conditional filings to the SCRC, but the committee will not begin substantive review until a state provides an unconditional attestation and full legal materials.
Several states have existing frameworks that could form the basis of certification applications:
Wyoming launched the Frontier Stable Token (FRNT) on January 7, 2026, making it the first U.S. state to issue its own stablecoin. FRNT is pegged to the dollar, backed by U.S. dollars and short-duration Treasuries with a legally mandated 102% reserve ratio, managed by Franklin Templeton, and deployed across seven blockchains via LayerZero. Wyoming also operates a Special Purpose Depository Institution (SPDI) charter.
New York supervises stablecoin issuers through its NYDFS limited-purpose trust framework, used by Paxos and Gemini. The regime predates the GENIUS Act and is widely considered among the most stringent state-level oversight models.
Texas, Florida, and Illinois rely on money-transmitter licensure that scales by transaction volume. These regimes are generally cheaper to enter than bank charters but may face challenges meeting the "substantially similar" standard.
California has rulemaking authority with regulations effective July 1, 2026, and is currently in the rule-making process.
State regulators have raised concerns that the federal certification deadline may arrive before federal agencies finalize their own GENIUS Act rules, creating a circular compliance problem: states cannot demonstrate "substantial similarity" to standards that do not yet exist in final form.
The GENIUS Act mandates that all PPSIs maintain reserves backing outstanding stablecoins on an at-least one-to-one basis at all times — a continuous requirement, not a periodic average. Eligible reserve assets are restricted to:
The 93-day maturity cap on Treasury bills is notable. It prevents issuers from reaching for yield on longer-duration instruments, limiting duration risk in reserve portfolios. The restriction is tighter than, for example, the EU's MiCA framework, which permits a broader range of highly liquid assets.
On September 24, 2026, the Federal Reserve Board proposed two additional rulemaking packages under the GENIUS Act:
Package 1 — Reserve and Capital Requirements: Payment stablecoin issuers supervised by the Fed must fully back tokens with eligible reserve assets. The proposal adds a 2% capital charge on uninsured reserve deposits and imposes risk management standards covering credit and operational risk.
Package 2 — Bank Subsidiary Process: Insured state member banks seeking to issue stablecoins through a subsidiary must obtain Fed approval. The proposal sets a 120-day decision window and a $5 million initial capital floor for the first three years of operations.
The Fed's proposals complement the OCC's chartering framework and Treasury's state certification process, but all three rulemaking tracks are proceeding on different timelines. The OCC targets November 2026; the Fed has not specified a final rule date; Treasury's substantive criteria remain in NPRM stage.
The $10 billion line creates two distinct competitive environments.
Above the line, the market is a two-player oligopoly. Tether and Circle together hold $257 billion — 81.7% of the $314 billion total stablecoin supply. Both are now locked into federal oversight. Circle has its OCC charter. Tether, as a non-U.S. entity (incorporated in the British Virgin Islands), faces additional jurisdictional questions. The GENIUS Act applies to stablecoins "issued in the United States," and Tether's operational structure may require restructuring to comply — or it may seek to operate under a foreign issuer pathway that Treasury has proposed but not finalized.
Below the line, the landscape is fragmented and growing. Ripple (RLUSD), Paxos (USDP/PYUSD for PayPal), BitGo, Fidelity, Bridge/Stripe, and World Liberty Financial all hold conditional or approved OCC charters, but none currently exceeds $10 billion in issuance. These entities may choose between federal and state pathways — an option that creates potential for regulatory arbitrage.
The American Bankers Association has flagged this arbitrage risk, arguing that state frameworks may permit broader operational latitude than the GENIUS Act's federal scope. The SCRC's "substantially similar" test is the intended safeguard, but its effectiveness depends on criteria that remain unfinished.
Wyoming's FRNT, with its 102% reserve ratio (exceeding the federal 100% floor), represents a different model: a government-issued stablecoin operating outside the private issuer framework entirely. Its classification under the GENIUS Act remains an open question.
The GENIUS Act's rulemaking infrastructure is taking shape, but it is arriving in pieces. Treasury's interim final rule is procedural scaffolding for a process whose substantive walls — the criteria for "substantial similarity" — remain unbuilt. The OCC is furthest ahead, with eleven charter actions and a November final-rule target. The Federal Reserve's proposals add capital and risk requirements but lack a finalized timeline.
The $10 billion threshold is the structural fact that shapes everything downstream. It compresses Tether and Circle into a federal regime while opening a parallel state track for smaller issuers — a track that cannot function until the SCRC has criteria to apply, forms to accept, and OMB clearance to process them. The market's two-tier future is legally defined but operationally incomplete.