Only Two of 10 Largest Dollar Stablecoins Meet GENIUS Act Reserve Rules, BPI Finds

The Bank Policy Institute (BPI) published a study on Friday, November 6, concluding that most dollar stablecoinsСтейблкоинA stablecoin is a crypto asset whose price is pegged to a fiat currency (most often the US dollar) and maintained by reserves or an algorithm. will not comply with the reserve asset requirements set by the GENIUS Act. According to PYMNTS, the authors analyzed reserve data for the 10 largest circulating dollar stablecoins, which accounted for 97% of all stablecoins as of June. The study's conclusion: currently only two of the ten tokens meet the law's requirements.

What the Law Requires

The GENIUS Act obliges payment stablecoin issuers to maintain reserves that prevent the coin from de-pegging from the dollar. According to the BPI's wording, backing must consist of U.S. Treasury securities with less than 93-day maturity, overnight reverse repurchase agreements secured by Treasuries, bank depositsДепозитA deposit is a transfer of money from a player or customer to their account with a casino, sportsbook, or exchange operator. Once the funds are credited, they become available for betting or trading. and other highly liquid assets. This reserve composition is meant to ensure issuers can quickly meet redemption obligations to token holders.

Who Passes the Test

According to the study, Circle's USDCUSDCUSDC (USD Coin) is a stablecoin issued at a 1:1 ratio to the US dollar and backed by cash reserves and short-term US Treasury bonds. and Paxos's PYUSD meet the requirements. Together they account for 26% of tokens issued among the ten largest. World Liberty's USD1 and Ripple USD, per BPI, do not meet the requirements: both are backed by money market funds holding agency debt and longer-dated Treasury securities. The authors stress that compliant reserves do not mean a stablecoin will always maintain its value.

What Falls Outside the Framework

The other major stablecoins are either issued offshoreОфшорAn offshore jurisdiction is a place where a company or bank account is registered, chosen for light taxation and regulation, often outside the country where the owners or clients are based. or backed by crypto assets. BPI says these tokens sit outside the law's framework and hold riskier reserve portfolios. The study notes that any stablecoin carries de-pegging risk, but in the authors' view these coins will continue to face a heightened risk in the future.

Timing and Context

Four of the ten largest stablecoins are offeredОфферAn offer is an advertiser's proposal to partners: the product together with payout terms, geos, and traffic requirements, for which the partner receives a reward. onshore. According to the report, they are expected to be subject to GENIUS Act requirements when the law takes effect next year. PYMNTS also cites its own survey of credit unions: 52% of executives cited cybersecurity and fraud risk as a barrier to engaging with cryptocurrency, and 44% pointed to member demand. These findings relate to the broader question of how prepared smaller financial institutions are for stablecoins.