The GENIUS Act's Rulemaking Deadline: What's Next for USDT, USDC, and New Entrants?

FinTech

The GENIUS Act's rulemaking deadline has arrived, but the rules are not ready. This raises questions about the future of USDT, USDC, and new entrants in the stablecoin market.

TL;DR
• The GENIUS Act's rulemaking deadline has arrived, but the rules are not ready.
• The deadline is not a stablecoin shutdown date, but rather a regulatory signal.
• The rules still being calibrated are commercially material, affecting USDT, USDC, and new entrants.

Summary
The GENIUS Act’s July 18, 2026 statutory deadline marks the end of the one‑year rulemaking period for six federal agencies to finalize stablecoin regulations, yet the Act itself does not take effect until January 18, 2027 or 120 days after final rules are issued.
• Capital floor: OCC proposes a $5 million minimum for new issuers.
• Liquidity requirement: 10% same‑day redemption, 30% within five days.
• Insured deposit cap: issuers over $25 billion must hold 0.5% of reserves, capped at $500 million.
• Service‑provider restriction: non‑permitted stablecoins barred from July 18, 2028.
• Existing tokens remain legal; the deadline signals regulatory readiness, not market shutdown.

The July 18 deadline is a regulatory signal, not a shutdown date. The Act activates on the earlier of January 18, 2027 or 120 days after final rules, giving issuers a clear window to align product architecture with forthcoming capital, liquidity, and AML standards.

Unfinished rules still carry commercial weight. The OCC’s proposed capital floor and liquidity framework directly affect Circle’s USDC and Tether’s USDT, both above the $25 billion threshold. The foreign‑issuer pathway under Section 5916 remains unresolved, delaying Tether’s compliance with Treasury comparability and OCC registration.

New entrants face higher fixed‑cost barriers. Banks, fintechs, and non‑bank issuers must navigate staggered comment periods that close after July 18, creating a fragmented compliance landscape. Incumbents with existing licenses gain an advantage, while startups must prepare for evolving capital and liquidity requirements.

Overall, the July 18 deadline underscores the need for proactive reserve placement, capital structuring, and product design. Firms should monitor agency proposals, engage in comment periods, and plan for the January 2027 effective date to ensure seamless integration of stablecoin offerings within the federal framework.

The GENIUS Act's rulemaking deadline has arrived, but the rules are not ready. This raises questions about the future of USDT, USDC, and new entrants in the stablecoin market.