Summary: 

• The CFTC has updated a prior staff letter to recognize national trust banks as eligible issuers of payment stablecoins.
• The change aligns with the GENIUS Act, the new U.S. framework for dollar-pegged stablecoins.
• Only fully backed, overcollateralized stablecoins qualify under the framework.
• Algorithmic and synthetic dollar models remain outside the recognized structure.

The Commodity Futures Trading Commission has revised its earlier position on payment stablecoins in a move that adds a new class of financial institutions into the matter. On Friday, the agency reissued a staff letter updating the criteria for what counts as acceptable payment stablecoins, formally including national trust banks among eligible issuers. This change came through an amendment to Staff Letter 25-40, originally issued on December 8, 2025. By expanding the list, the CFTC now recognizes that these federally chartered institutions can issue fiat-pegged tokens that fit within its collateral framework.

Well, National trust banks are a different kind of bank than the typical retail institutions people use for savings or loans. They focus on custodial services, estate administration, and asset management. In the digital asset space, their structure has made them a natural fit for safeguarding crypto and handling token-related services. The updated position signals that U.S. regulators are setting boundaries for stablecoins and also clarifying which types of institutions can operate inside those boundaries. That clarity matters for both issuers and market participants who rely on stablecoins as collateral in trading and derivatives markets overseen by the CFTC. 

How the GENIUS Act shapes the stablecoin 

The revised letter closely reflects the direction set by the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which became law in July 2025. The legislation created a formal framework for U.S. dollar stablecoins, defining what kinds of tokens fit into the regulated category. At its core, the GENIUS Act focuses on stability through backing. Only overcollateralized stablecoins qualify. That means tokens must be backed 1:1 by safe and liquid assets such as U.S. dollar deposits or short-term government securities like Treasury Bills. This structure is meant to reduce the risk of sudden collapses in value and to give holders clearer assurances about redemption.

Models that depend on algorithms or complex market mechanisms to hold their peg were left outside this structure. Algorithmic stablecoins and synthetic dollar designs, which can depend more on software rules or trading dynamics than direct reserves, are not recognized under the framework. The CFTC's updated letter shows how that law is being translated into practical rules. By acknowledging national trust banks as eligible issuers, the agency is aligning its collateral policies with the legal environment created by the GENIUS Act. It also highlights how stablecoin regulations are connected with institutions. 

Chairman Michael S. Selig framed the development as part of a broader shift. The letter states: "During President Trump's initial term, the Office of the Comptroller of the Currency made history by chartering the first national trust banks with authority to custody and issue payment stablecoins. These national trust banks continue to play an important role in the payment stablecoin ecosystem," said Chairman Michael S. Selig. "I'm pleased that the CFTC staff is amending its previously issued no-action letter to expand the list of eligible tokenized collateral to include payment stablecoins issued by these institutions. With the enactment of the GENIUS Act and the CFTC's new eligible collateral framework, America is the global leader in payment stablecoin innovation."

That statement ties together two threads: the first one is the Office of the Comptroller of the Currency to grant charters to these banks, and the present effort to integrate them more fully into the stablecoin regulatory system.

What this means for markets and stablecoin users

Stablecoins are not just medium for moving money between crypto exchanges. They are widely used as collateral in derivatives trading, lending platforms, and other financial structures. When the CFTC updates what counts as eligible collateral, it can influence how firms structure their operations and which tokens they choose to hold. By bringing national trust bank-issued stablecoins into the fold, the CFTC is effectively widening the pool of tokens that can fit within compliant trading setups. That may encourage more activity around stablecoins issued by regulated U.S. institutions rather than offshore or less clearly supervised entities.

For users, the shift reinforces a trend toward clearer lines between regulated and unregulated stablecoin models. Tokens that meet the GENIUS Act's backing requirements and are issued by recognized institutions may be viewed as lower-risk within regulated financial products. Meanwhile, algorithmic and synthetic designs remain outside this category, which could limit their role in certain markets. The update also signals that U.S. policy is moving toward a model where stablecoin innovation happens inside a defined legal structure rather than in gray areas. The focus is on full backing, identifiable issuers, and institutions with established oversight. That approach may not cover every design in the crypto space, but it draws a clearer map for those aiming to operate within U.S. regulatory lines.

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