Stablecoins were a gray area with no clear federal rules. The GENIUS Act now demands full backing and bankruptcy protections. But the devil is in the details - and regulators are still writing those details.
The stablecoin market now faces a comprehensive regulatory framework. The requirement for full backing and bankruptcy protections aims to prevent collapses, while the ban on yield payments addresses concerns from banking regulators about stablecoins competing with bank deposits. Existing issuers have until July 2028 to comply, giving them three years to adjust their business models and reserve holdings.
Think of it like a safety deposit box: for every digital dollar in circulation, a real dollar's worth of safe assets must sit inside.
State-licensed issuers can operate until they reach $10 billion in outstanding stablecoins. Above that threshold, they must shift to federal oversight within 360 days or get a waiver. Once stablecoins hit $50 billion, the issuer must also submit audited financial statements under PCAOB standards - a higher bar for accounting.
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Multiple federal agencies must write final rules by July 18, 2026 - one year after enactment. The OCC, Treasury, FDIC, and NCUA all published proposed rules in early 2026.
The deadline for submitting comments on Treasury's proposed rule regarding state certification was June 2, 2026. The OCC's proposed rule on the yield ban was published March 2, 2026.
Circle, Paxos, Ripple, BitGo, and Fidelity all received conditional OCC national trust bank charters in December 2025, positioning themselves for the federal track.
Tether, the largest stablecoin issuer, is based in El Salvador. To serve US businesses, it needs a Treasury reciprocity determination - not yet issued as of May 2026. Tether has announced plans to register under the Act's foreign issuer pathway and launched a separate US-focused stablecoin called USAT designed to comply with the GENIUS Act.
The Stablecoin Certification Review Committee - made up of the Treasury Secretary, Fed Chair, and FDIC Chair - must unanimously certify state regulatory regimes as "substantially similar" to federal standards. That unanimous vote requirement could make state certification politically difficult. It may create a de facto federal-only system if states cannot meet the bar.
Treasury's proposed rule on state certification principles was published April 1, 2026, with comments due June 2, 2026. The committee has 30 days to approve or deny a state's certification once submitted.
Legal scholars are watching how the bankruptcy "superpriority" language will actually work in a real insolvency case - Georgetown Law professor Adam Levitin argues the Act's priority language may not give stablecoin holders the first priority they expect, as secured claims could be paid first.
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