Stablecoin Rulemaking Lags Behind GENIUS Act Deadline

The GENIUS Act, signed on July 18 2025, required all federal agencies to issue stablecoin regulations within one year. The deadline passed on July 18 2026 without any final rules.

Agency timelines

The Office of the Comptroller of the Currency (OCC) now expects to publish its final prudential rule by November 2026. With a 120‑day implementation window, the rule would become effective around March 2027. FinCEN and OFAC’s anti‑money‑laundering and sanctions rule is still in draft form and may not be finalized until early 2027. The FDIC and NCUA are advancing parallel proposals for state‑chartered banks and credit unions.

Key provisions of the GENIUS Act

• All stablecoin issuers serving U.S. users must be licensed.
• Reserves must be 100 % in U.S. Treasury bills, insured deposits, or Treasury repurchase agreements.
• Weekly reporting to the primary regulator and monthly public disclosures are required.
• Issuers with market caps over $50 billion must undergo annual audits.

Impact on major issuers

Circle’s USDC is closest to compliance, holding most reserves in Treasury bills. The GENIUS Act may force Circle to eliminate its money‑market‑fund component if the OCC defines “qualifying reserves” narrowly.

Ripple’s RLUSD, launched with Treasury‑backed reserves, already meets the act’s requirements.

The Tether dilemma

Tether Ltd., based in the British Virgin Islands, has not received a Treasury reciprocity determination, which is required for foreign issuers to serve U.S. businesses. Without it, USDT cannot be offered to U.S. entities once the act takes effect.

Tether is pursuing two strategies: (1) seeking a reciprocity determination to continue USDT sales, and (2) launching USAT, a U.S.–focused stablecoin backed entirely by Treasury bills.

Market shifts

USDT’s share of U.S. exchange trading volume fell from 72 % in January 2026 to about 64 % in August 2026, while USDC’s share rose from 18 % to 26 % over the same period.

Effective date uncertainty

The act stipulates that it becomes effective either 18 months after signing (January 18 2027) or 120 days after final rules are issued, whichever occurs first. Because final rules are still pending, the 120‑day clock has not started, pushing the practical effective date to early 2027 or later, depending on agency timelines.