KEY FACTS: The U.S. Commodity Futures Trading Commission (CFTC) has reissued Staff Letter 25-40 (originally issued December 8, 2025, and amended as Staff Letter 26-05 around early February 2026) to clarify and expand the definition of "payment stablecoin," explicitly confirming that national trust banks, federally chartered institutions authorized to operate nationwide and specializing in custodial services, asset management, and estate execution rather than retail banking, can serve as eligible issuers of these fiat-pegged digital tokens. The update corrects an unintended oversight in the original letter, ensuring national trust banks receive equal treatment alongside state-regulated entities (such as those issuing USDC or USDP) for purposes of the CFTC's no-action position, which allows futures commission merchants to accept qualifying payment stablecoins as customer margin collateral in derivatives trading. This move aligns with the broader U.S. stablecoin regulatory framework established by the GENIUS Act, signed into law by President Donald Trump in July 2025, which mandates 1:1 over-collateralization with high-quality assets like cash or short-term U.S. Treasury securities, strict redemption rights at par value, and prohibits algorithmic or synthetic stablecoins reliant on non-direct backing mechanisms.

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Source: CFTC

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CFTC Okays National Trust Banks to Issue Payment Stablecoins

The U.S. Commodity Futures Trading Commission (CFTC) has taken a significant step to broaden the regulatory landscape for stablecoins by explicitly including national trust banks as eligible issuers of payment stablecoins. This clarification comes through a reissued staff letter, signaling continued efforts to integrate digital dollar-pegged assets into the traditional financial system under a clearer federal framework.

In a move announced recently, the CFTC's Market Participants Division reissued Staff Letter 25-40 (originally dated December 8, 2025) with a targeted amendment. The update expands the definition of "payment stablecoin" to confirm that national trust banks, federally chartered institutions authorized to operate across all 50 U.S. states, can issue these fiat-pegged tokens without exclusion. The letter states that the division "did not intend to exclude national trust banks as issuers of payment stablecoins for purposes of Letter 25-40," and thus reissued the guidance to reflect this expanded scope.

National trust banks differ from conventional commercial banks in their focus. They typically do not offer retail services such as lending, checking accounts, or deposit-taking for everyday consumers. Instead, these institutions specialize in custodial services, acting as executors for estates, providing asset management, and safeguarding client assets. Historically, during President Donald Trump's initial term, the Office of the Comptroller of the Currency (OCC) chartered some of the first national trust banks with explicit authority to custody and issue payment stablecoins, setting a precedent for their role in digital assets.

The revision addresses an unintended oversight in the original letter, which had created ambiguity about whether federally chartered national trust banks could participate on equal footing with state-regulated entities like money transmitters or trust companies (such as those behind major stablecoins like USDC from Circle or USDP from Paxos). By clarifying their inclusion, the CFTC ensures parity, allowing stablecoins issued by these banks to qualify under its no-action position, particularly relevant for uses like margin collateral in derivatives trading.

This development aligns closely with the U.S. regulatory evolution for stablecoins following the enactment of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in July 2025. Signed into law by President Trump, the GENIUS Act established a comprehensive federal framework specifically for U.S. dollar-pegged stablecoins. It emphasizes strict requirements, including 1:1 over-collateralization with high-quality assets such as cash deposits or short-term government securities (e.g., U.S. Treasury Bills), clear redemption policies to ensure holders can convert tokens back to fiat at par value, and exclusion of algorithmic stablecoins and synthetic assets that rely on software mechanisms or complex trading strategies to maintain their peg, rather than direct fiat or Treasury backing.

The act aims to foster innovation while prioritizing financial stability, consumer protection, and compliance with anti-money laundering and counter-terrorism financing standards.

The CFTC's update builds on related actions by other regulators. In December 2025, the Federal Deposit Insurance Corporation (FDIC) outlined a proposal enabling commercial banks to issue stablecoins through subsidiaries, subject to FDIC oversight and full compliance with GENIUS Act standards. This includes evaluations of the parent bank's and subsidiary's financial health, reserve management, and risk controls.

Together, these steps reflect a maturing regulatory environment for stablecoins in the United States. By recognizing national trust banks as legitimate issuers, the CFTC removes a potential barrier that could have limited federally chartered institutions from competing in the growing market for tokenized dollar assets.

The reissued letter also ties into ongoing discussions about the role of stablecoins in maintaining U.S. dollar dominance globally, as tokenized fiat alternatives gain traction worldwide. With clearer rules in place, experts anticipate increased adoption by both crypto-native firms and traditional financial players, provided they adhere to the stringent backing and transparency mandates of the GENIUS framework. This CFTC clarification represents another incremental but meaningful advancement toward regulated, mainstream acceptance of dollar-pegged digital tokens.

Information Sources:

• CFTC Blog
• Coin Bureau/ X
• Yahoo finance
• Cointelegraph

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