The GENIUS Act: Rules are in place, final regulations are not
Congress passed the GENIUS Act, short for Guiding and Establishing National Innovation for U.S. Stablecoins Act, on July 17, 2025. President Trump signed it into law the following day. Regulators have missed the deadline to finish the specific capital, reserve, and licensing rules banks would need to follow.
Here is where the missed deadline leaves things: The law's substantive requirements now default to an effective date of Jan. 18, 2027, or 120 days after final rules are published, whichever comes first. Existing stablecoins like USDT and USDC remain lawful in the meantime, but banks and processors still do not have a finalized rulebook to build against.
- The Office of the Comptroller of the Currency (OCC) issued its proposed rule in February 2026, setting a $5 million minimum capital floor and a tiered liquidity framework for new issuers; its comment period closed May 1, 2026. The Fed, OCC, FDIC, and other regulators followed with a joint proposal in June 2026 requiring customer identification programs, with comments due Aug. 21, 2026.
- The law requires payment stablecoin issuers to maintain 1:1 reserves in eligible assets: U.S. dollars, demand deposits, or short-term Treasury bills maturing within 93 days, according to the Congressional Research Service. Repurchase agreements backed by Treasuries are also permitted.
- Both banks and nonbanks can issue stablecoins under the GENIUS Act, but nonbank issuers require approval from the Treasury Secretary and the chairs of the Federal Reserve and the FDIC. Companies including Walmart (WMT +0.42%) and Amazon (AMZN +15.21%) are reportedly exploring issuing their own coins.
The GENIUS Act does not require stablecoin issuers to meet the same capital standards as traditional banks, a gap critics argue leaves consumers underprotected. Detractors also contend that the law does not do enough to prevent stablecoins from being used for illicit transactions.
The OCC projected in early 2026 that the stablecoin market cap could reach $500 billion by year-end, up from roughly $200 billion in 2025, per Chainalysis, a blockchain data platform.
Stablecoin risks, according to the Federal Reserve
The Federal Reserve Bank of Atlanta published an article on stablecoin risks on March 16, 2026. Here are some of the main takeaways.
- Reserve quality and redemption risk are the top structural concerns: Regulators need assurance that stablecoin reserves are high-quality, transparent, and redeemable on demand, but those conditions vary across issuers and are not yet uniformly enforced.
- De-pegging events pose a systemic threat: If a major stablecoin issuer, exchange, or counterparty fails and the value of a stablecoin loses its 1:1 peg to the dollar, a loss of confidence could trigger a run comparable to bank panics in the pre-deposit-insurance era.
- Stablecoin transactions may not be captured in traditional economic data, creating blind spots for monetary policymakers. International standards for stablecoins remain fragmented, and cross-border use adds further complexity.
Data from Chainalysis cited in the report showed that global digital asset use grew significantly in 2025, driven by inflation hedging in Latin America, remittances in South Asia, and geopolitical demand in Eastern Europe and the Middle East. The United States ranked as the world's second-largest regional crypto market in 2025.
The stablecoin market has cooled even as transaction volume sets records
Total stablecoin market cap peaked around $320 billion in May 2026, then fell roughly $10 billion by mid-July, the largest dollar decline since the Terra-Luna collapse in 2022, according to CoinDesk and RWA.xyz data. Trackers put the stablecoin market at $300 billion to $313 billion in mid-July 2026, depending on the methodology, making the OCC's $500 billion year-end projection unlikely to be met.
Visa's Onchain Analytics dashboard, built on data from Allium, puts average stablecoin supply at $269.4 billion over the trailing 12 months, in the same broad range.
Transaction volume tells a different story, and the gap between headline and real-economy figures is wide. Visa's dashboard shows $102.3 trillion in total stablecoin transaction volume over the trailing 12 months, but that figure includes bot- and exchange-driven activity. Adjusted for that noise, the same 12 months come to $15.4 trillion, and the portion Visa classifies as retail-sized, its closest proxy for everyday consumer spending, is just $79.8 billion.
Monthly adjusted volume on Visa's dashboard peaked at $1.79 trillion in June 2026, up 63% from May, before slipping back to $1.24 trillion in July; first-half 2026 volume totaled $8.53 trillion, already above the $5.8 trillion processed in all of 2024.
