A coordinated push by US regulators is looking to encourage the institutional use of digital dollars.
The US Commodity Futures Trading Commission (CFTC) has altered the definition of what a “payment stablecoin” is to include tokens issued by national trust banks.
Under the revised guidance in reissued CFTC Staff Letter 25-40, futures commission merchants (FCMs) may accept payment stablecoins issued by national trust banks as customer margin collateral and hold them in segregated customer accounts without triggering enforcement action.
The original letter, issued in December 2025, addressed the use of non-securities digital assets as collateral but did not explicitly include national trust banks as eligible issuers.
CFTC staff said the exclusion was unintentional and changed the guidance to reflect that some qualifying stablecoins, including Pax Dollar (USDP), are issued by federally chartered trust banks.
“During President [Donald] 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,” said CFTC Chairman Michael Selig.
“These national trust banks continue to play an important role in the payment stablecoin ecosystem.”
He went on to explain how the update expands the pool of eligible tokenised collateral and aligns with the agency’s evolving digital asset framework.
Bank-issued Stablecoins cleared for institutional use
Those following the US stablecoin beat will recognise the update as part of significant changes in Washington’s approach to digital assets following passage of the GENIUS Act and a realignment by US Treasury Secretary Scott Bessent.
Speaking last week before Congress, Bessent placed stablecoins on a pedestal, highlighting their rise from niche payment instruments to core components of US financial infrastructure.
“The GENIUS Act… and the stablecoins that will be created with that could in fact be an important feature of financing the US government,” he said, describing the legislation as a watershed moment in bringing stablecoin issuance and oversight back onshore.
Bessent also said the Treasury is moving “with deliberate speed” to implement the Act and complete its regulatory framework.
The inclusion of national trust banks is particularly notable because these institutions occupy a middle ground between traditional banks and fintech infrastructure providers, offering custody, issuance and settlement services purpose-built for tokenised assets without operating full-service commercial banking models.
Issuing becomes more competitive
The CFTC’s clarification adds a new competitive angle to the stablecoin market, where bank‑regulated issuers have recently gained ground.
Paxos-issued tokens, for instance, such as USDP and PayPal USD (PYUSD) already boast a decent share of US-regulated stablecoin activity, with PYUSD surpassing $300m in circulation within months of launch.
While still small compared with the $225bn US dollar–denominated stablecoin market, according to 2025 research by JP Morgan, the regulatory recognition of national trusts gives these issuers a structural edge.
Recognising national trusts as eligible issuers effectively elevates bank‑supervised stablecoins into a different risk category from tokens issued under state money-transmitter frameworks.
The distinction matters for payment firms, processors and institutional liquidity providers, many of whom face pressure to prioritise tokens with clear federal oversight.
It also raises competitive pressure on other issuers, who currently dominate the market. Tether and Circle together account for roughly 87% of all stablecoin supply but operate outside the national trust framework.
One specific company which could be directly impacted by this change is Ripple, which secured conditional approval from the Office of the Comptroller of the Currency in late 2025 to establish Ripple National Trust Bank.
That status could give Ripple a clearer path into the institutional stablecoin market, particularly as payment firms and liquidity providers reassess which tokens carry the strongest regulatory credentials.
