The Commodity Futures Trading Commission (CFTC) has taken a significant step to include national trust banks in the framework for payment stablecoins. This move comes as part of a revision to a previously issued staff letter, aligning with the GENIUS stablecoin framework regulations.
On Friday, the CFTC reissued a staff letter to expand the eligibility criteria for payment stablecoins, now incorporating national trust banks as potential issuers of these fiat-pegged tokens. This update to Staff Letter 25-40, initially released on December 8, 2025, recognizes national trust banks as key financial entities allowed to operate across all 50 US states. Unlike traditional banks, these institutions focus on custodial services, asset management, and acting as executors, rather than offering retail banking services like loans or checking accounts.
In clarifying the update, the CFTC's Market Participants Division stated that the original intention was not to exclude national trust banks from issuing payment stablecoins. Consequently, the division has reissued the contents of Letter 25-40 with a broadened definition that now includes these banks.
This revision echoes the regulatory environment in the US, especially following President Donald Trump's enactment of the GENIUS stablecoin bill in July 2025. The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act provides a detailed regulatory framework for US dollar-stablecoins, ensuring they are pegged to the dollar securely.
In a related development, the Federal Deposit Insurance Corporation (FDIC) introduced a proposal in December 2025, which outlines a plan for commercial banks to issue stablecoins. Under this proposal, banks can issue stablecoins through subsidiaries, subject to FDIC oversight, ensuring compliance with the GENIUS Act. The requirements include policies for redemption, adequate collateral backing the stablecoin with cash deposits and short-term government securities, and a thorough assessment of the bank and its subsidiary's financial health.
The GENIUS Act mandates that only overcollateralized stablecoins, backed 1:1 with fiat currency deposits or short-term government securities like US Treasury Bills, are recognized. It explicitly excludes algorithmic stablecoins and synthetic dollars, which rely on software or market strategies to maintain their dollar pegs, from the regulatory framework.
This development marks a significant evolution in the US regulatory landscape, setting the stage for stablecoin issuance by a wider range of financial institutions, enhancing the stability and transparency of the US stablecoin market.