The 26% Survivors: GENIUS Reserve Tests Split the Stablecoin Map

A Bank Policy Institute study on Nov. 6 found that only two of the ten largest dollar stablecoins, representing 26 percent of outstanding tokens, meet the GENIUS Act’s reserve asset requirements — compliance is a gate, not a guarantee.

Out of Ten Stablecoins, Only Two Pass

On Nov. 6, Bank Policy Institute (BPI) researchers Laurence Bristow and Eva Funaki published a note examining the reserve assets backing the ten largest dollar stablecoins by circulation as of June 30, 2026. These ten tokens account for 97 percent of all stablecoins outstanding — not a sample, but the market itself. The conclusion is blunt: only two coins, representing 26 percent of outstanding tokens, hold reserves that align with GENIUS Act requirements; another 2 percent are expected to come into compliance soon; the remaining 72 percent fall short, with offshore stablecoins accounting for 65 percent and crypto-backed stablecoins for 7 percent.

The GENIUS Act’s reserve requirements for “payment stablecoins” are specific: U.S. Treasury securities with less than 93-day maturity, overnight reverse repurchase agreements secured by Treasuries, and bank deposits, among other highly liquid assets. Congress passed the Act in July 2025, the OCC finalized implementing rules on Oct. 21, and the regime takes effect on Jan. 18, 2027. With only about 70 days left until the effective date, the market’s existing reserve structures have already delivered the verdict — most top coins fail the test under their current asset mixes.

The four onshore coins are the focus. Circle’s USDC and Paxos’ PYUSD hold GENIUS-compliant reserves; World Liberty’s USD1 and Ripple USD do not, because both hold money market funds that in turn hold agency debt and longer-dated Treasuries. BPI also noted that World Liberty’s OCC conditional approval (Decision No. 1385) requires its stablecoin business to comply with the GENIUS Act, and Ripple USD’s state-trust framework is “subject to alignment with GENIUS requirements” — the question for both is not whether they will be covered, but when they will adjust their asset structures.

Two Pipelines Open at Once: Stablecoins Enter the Clearinghouse, Crypto Enters the Tax Office

A CFTC no-action letter clears the way for stablecoin margin in clearing, while Hong Kong, China completes crypto-asset tax reporting legislation within the same 48 hours. One governs settlement, the other governs tax, as crypto assets are wired into two of traditional finance’s deepest pipes.

The Clearing Pipe: Trust Companies Move to the Daily Settlement Seat

On November 5, the CFTC’s Division of Clearing and Risk issued Staff Letter 26-30 (Press Release 9322-26), signed by Acting Director Richard Haynes. The core conclusion is a single sentence: a derivatives clearing organization (DCO) may use a trust company to conduct daily settlements with clearing members, provided it treats the trust company as a settlement bank and complies with all requirements of Regulations 39.14(c) and 39.14(d). This is a no-action letter, meaning staff would not recommend an enforcement action against the arrangement, not a revision of the rule itself.

The trigger was Nodal Clear. This registered DCO is the common clearinghouse for Nodal Exchange and Coinbase Derivatives, both CFTC-designated contract markets, is wholly owned indirectly by the European Energy Exchange (EEX), and has elected to comply with the Subpart C requirements applicable to systemically important DCOs. On October 29, Nodal Clear filed a request on behalf of itself and all registered DCOs, stating it is preparing to accept stablecoins as initial margin collateral and describing state-regulated trust companies as among the leading custodians of digital assets. Bringing trust companies into the settlement workflow would integrate digital assets into existing daily collateral-movement processes. Nodal’s argument was straightforward: Regulation 39.14, essentially unrevised since its adoption in 2011, defines a settlement bank only as a bank and contains no reference to trust companies, yet Section 4d of the Commodity Exchange Act and CFTC Regulations Parts 1 and 22 already allow customer funds to be held at a bank or trust company. If trust companies are already trusted to hold customer funds, they should equally be able to perform daily settlement.

The CFTC accepted this logic without relaxing any control requirements. Regulation 39.14(c) requires a DCO to maintain documented settlement-bank selection criteria covering capitalization, creditworthiness, liquidity access, operational reliability and regulation or supervision, and to monitor its exposure to those institutions on an ongoing basis. Regulation 39.14(d) addresses settlement finality: transfers must become irrevocable and unconditional no later than when the DCO’s accounts are debited or credited. The no-action condition is to apply both provisions to trust companies as if they were settlement banks. It is neither an exemption nor a waiver of selection, monitoring or finality obligations. In other words, the CFTC simply opened the “settlement bank” slot to trust companies while leaving the rest of the rulebook intact. The letter applies to any DCO that meets its conditions, not just Nodal Clear.

The letter’s weight lies in how it extends the OCC’s trust-charter roadmap. Since December 2025, the OCC has issued at least nine national trust bank charters to crypto firms (the count Senator Warren cited in her May 18 letter to Comptroller Gould), including Circle, Coinbase and Ripple. National trust banks can custody assets and settle payments, but they carry no FDIC insurance and cannot take deposits or make loans. By bringing trust companies into daily derivatives settlement, the CFTC has effectively seated them at the center of derivatives clearing, outside the full bank rulebook. Community banks have already taken their fight to court: in early October, the Independent Community Bankers of America (ICBA) sued the OCC in federal court in Washington, D.C., seeking to strike down the trust-charter rule and the conditional approval granted to Protego, arguing the approach “creates a gaping hole in financial regulation.” The CFTC’s no-action letter widens the target of that litigation.

A related announcement the same week reinforced the direction of this pipe. On November 4, Coinbase said it would offer eligible institutional clients in the U.S. access to Deribit options, dated futures and perpetual futures through Coinbase Financial Markets, spanning more than 20 assets and accepting BTC, ETH and USDC as collateral. Orders flow through Coinbase Bermuda to Deribit for execution and clearing, with the margin model run by Deribit. It is another attempt by a U.S.-registered futures broker to bring the world’s largest crypto derivatives liquidity to domestic institutions, and in its collateral pool, stablecoins sit alongside bitcoin and ether.

The Tax Pipe: CARF Lands, Crypto Enters the Automatic Exchange Network

On November 4, Hong Kong, China’s Legislative Council passed the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 on third reading, transposing the OECD’s Crypto-Asset Reporting Framework (CARF) and the amended Common Reporting Standard (CRS) into local law. It is the territory’s latest legislative move on digital assets following the Stablecoins Ordinance enacted in August 2025. Secretary for Financial Services and the Treasury Christopher Hui said implementing the latest international standard for automatic exchange of tax information is critical to maintaining Hong Kong’s reputation as an international financial and commercial center, and would give crypto-asset service providers, financial institutions and digital asset users greater confidence to operate and invest long-term in the city.

The timeline is clear: CARF takes effect on January 1, 2027, when reporting service providers must collect the transaction data specified under the framework, and the Inland Revenue Department begins its first automatic exchanges with partner tax jurisdictions in 2028. The amended CRS takes effect in 2028, with account information exchanged under the new standard from 2029. Exchanges operate on a reciprocal basis, subject to data confidentiality and security safeguards. To help the industry adapt, the IRD will issue guidance, has set up a dedicated task force for technical support, and has launched a self-assessment tool.

The coverage is broader than most expect. The ordinance defines “crypto-assets” as assets relying on cryptographically secured distributed ledgers (DLT) or similar technology, covering two broad categories: crypto tokens, which represent a claim, membership right or property right against a person or entity and can be exchanged digitally for fiat or other crypto assets; and fungible and non-fungible tokens (FTs and NFTs) that can be bought, sold or transferred in digital form. With narrow exceptions such as central bank digital currencies (CBDCs), mainstream assets including Bitcoin, Ethereum and Solana are all in scope. From 2028, transaction data occurring on Hong Kong, China platforms will flow annually to partner tax jurisdictions, just as financial account data has been exchanged under CRS since 2018.

Industry attention centers on two questions: first, whether the scope of “covered service providers” will extend to custody, brokerage and over-the-counter (OTC) trading; second, the list of initial exchange partners, which will determine which countries’ tax authorities can see trading data from Hong Kong, China platforms after 2028. Regulators have already confirmed that reporting crypto-asset service providers with a reporting nexus to Hong Kong must register with the tax authority and retain due diligence records, with an administrative penalty mechanism established alongside.

Viewed together, the throughline is clear: whether the CFTC’s clearing pipe or Hong Kong’s tax pipe, both follow the route of plugging crypto assets into existing infrastructure rather than legislating a new regime for them. The CFTC did not amend Regulation 39.14; it merely added trust companies to the list of institutions that can serve as settlement banks. Hong Kong did not create a new tax for crypto assets; it folded CARF and the amended CRS into the existing tax-transparency framework. This “embedded” regulation stands in sharp contrast to CLARITY-style market-structure legislation. With congressional legislation frozen and agency rules reversible, clearinghouses and tax authorities have become the two least visible yet hardest-to-reverse points of entry.

Implications for Practitioners