The commodities regulator broadens criteria for payment stablecoins, allowing federally chartered trust banks to issue them under a no-action letter. What to know:
CFTC’s Letter 25-40 updates stablecoin definitions to include national trust banks as issuers, potentially unlocking billions in new regulated supply. This aligns with the GENIUS Act, emphasizing high-quality reserves like U.S. Treasuries, and could accelerate tokenized asset growth amid rising institutional demand. Industry experts see this as complementary to the SEC’s recent 2% haircut guidance, fostering a more unified regulatory framework for digital dollars.
The U.S. Commodity Futures Trading Commission (CFTC) has quietly expanded its criteria for payment stablecoin issuers, granting national trust banks the ability to enter the market under a no-action position outlined in Letter 25-40, issued earlier this month. This move, part of ongoing efforts to integrate blockchain technology into traditional finance, comes on the heels of the SEC’s FAQ update allowing broker-dealers a mere 2% haircut on stablecoin holdings for net capital calculations.
Previously, stablecoin issuance was largely confined to state-chartered entities or offshore operations, limiting scalability and raising compliance hurdles. The CFTC’s revision emphasizes “high-quality liquid assets” such as U.S. Treasuries and cash equivalents as reserves, mirroring standards in the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act passed last year. This could enable major players like JPMorgan or Wells Fargo’s trust arms to launch their own stablecoins, potentially adding tens of billions to the current $150 billion market cap dominated by USDC and USDT.
“This is a game-changer for tokenized assets,” noted Brian Brooks, former Acting Comptroller of the Currency and now a board member at Circle, in a LinkedIn post. “National banks bring credibility and scale that could dwarf current volumes, making stablecoins a staple in cross-border payments and DeFi.” The update addresses concerns over reserve transparency, requiring issuers to maintain 1:1 backing and undergo regular audits, which proponents argue will reduce risks seen in past incidents like the 2022 Terra collapse.
The CFTC’s action is viewed as a strategic complement to the SEC’s shift, which treats stablecoins akin to money market funds for broker-dealers, allowing firms to count 98% of holdings toward regulatory capital. Together, these changes could supercharge institutional adoption, enabling seamless custody, trading, and settlement of tokenized securities. As one X user highlighted, this “unclogs treasuries” and makes stablecoins economically viable for Wall Street giants like Goldman Sachs or Robinhood.
However, the guidance remains informal—a no-action letter rather than a formal rule—leaving room for reversal under future administrations. Crypto advocates, including the Digital Chamber, are pushing for comprehensive legislation to codify these policies, warning that fragmented agency approaches could stifle innovation. CFTC Chair Rostin Behnam echoed this in a statement, noting the need to “amend existing rules to better accommodate digital assets while protecting market integrity.”
With stablecoin transaction volumes surpassing $10 trillion annually, this expansion positions the U.S. as a leader in regulated digital finance, potentially pressuring Europe and Asia to follow suit. As DeFi protocols integrate more real-world assets, experts predict a surge in on-chain liquidity, with USDC’s $74.5 billion market cap poised for exponential growth.
