On Saturday, US regulators failed to finalize the joint rules required by the GENIUS Act for payment stablecoins, extending regulatory ambiguity beyond the July 18, 2026 deadline.

No emergency regulations took effect immediately, allowing stablecoin issuers to continue operations under existing federal and state frameworks.

Circle remains unable to obtain the federal certification necessary to market USDC as a fully compliant payment stablecoin to conservative corporate treasuries.

Banks continue to avoid holding stablecoin reserve deposits due to the Federal Deposit Insurance Corporation’s lack of clarity on how such deposits impact capital requirements.

The 2028 deadline prohibiting non-compliant stablecoins from exchange listings remains unchanged, compressing the preparation timeline for issuers.

Despite the missed deadline, trading and issuance of stablecoins have not been interrupted. Instead, issuers, banks, and exchanges operate in regulatory limbo where the anticipated rules are absent and no fallback procedures are defined.

Circle and Tether continue functioning under fragmented state licenses and private attestations established before the law passed in July 2025.

Circle’s inability to present the federal payment-stablecoin designation hampers its appeal to conservative corporate clients such as Walmart or Apple, hindering its positioning as a compliant, bank-friendly stablecoin issuer.

In contrast, Tether expands actively in Latin America and Southeast Asia using its offshore structure, unaffected by US regulatory delays. This allows Tether to capture market share offshore during the ongoing US rulemaking vacuum.

The situation creates distinct impacts across key stakeholders:

  • Circle/USDC: Federal certification remains unavailable; continues operation under state licenses.
  • Tether/USDT: Expands offshore market share with no exposure to US regulatory delays.
  • Banks: Avoid reserve deposits pending FDIC guidance on capital rules.
  • Exchanges: Face pressure before the unchanged 2028 ban on listing non-compliant stablecoins.

The delay is caused by disagreement between the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation over reserve composition for stablecoin issuers.

Stablecoin market stability amid ongoing regulatory issues reflects these tensions and the divergent paths of major issuers.

This information is provided for informational purposes only and is not financial advice.