U.S. Stablecoin Policy Under the 2025-2026 Trump Administration

What actually changed in U.S. stablecoin policy between 2025 and 2026

When the Trump administration took office in January 2025, stablecoin policy was already a live issue. The Biden-era SEC, under Chair Gary Gensler, had treated most crypto activity through an enforcement lens, including a long-running case against USDC issuer Circle and a separate dispute with Tether, the company behind USDT, over reserve claims. The Treasury and the Office of the Comptroller of the Currency (OCC) had been more receptive, but there was no federal statute defining what a payment stablecoin was, who could issue one, or what backstop a holder could expect.

Two parallel things happened in 2025. First, Congress passed and the President signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act, usually called the GENIUS Act. It is the first federal law that defines payment stablecoins, sets reserve and audit requirements, and creates a licensing pathway through the OCC for non-bank issuers. Second, the new SEC leadership, with Paul Atkins confirmed as Chair in mid-2025, moved quickly to drop or settle several high-profile enforcement actions that had defined the prior era.

For users, the second half of 2025 and the first half of 2026 looked calmer. There were fewer surprise Wells notices, fewer headline-grabbing lawsuits, and a more consultative tone from Washington. But the policy frame did not become permissionless. The GENIUS Act imposes conditions that are, in several places, stricter than what existed before. The story is not deregulation, it is re-regulation under a different rulebook.

The risks most readers underestimate

Stablecoins are often described as the safe, boring corner of crypto. In practice they carry a stack of risks that the 2025-2026 policy shift did not eliminate, and in some cases amplified.

Reserve risk is the obvious one. A payment stablecoin promises to be redeemable at par, usually one U.S. dollar per token. That promise is only as good as the assets backing it. The TerraUSD collapse in 2022 wiped out roughly 40 billion dollars in market value when its algorithmic peg broke. The GENIUS Act tightens disclosure for federally licensed issuers, but it does not insure holders. If a licensed issuer fails and its reserves are insufficient, holders stand in line as unsecured creditors, much like depositors at a failed bank, but without FDIC-style insurance.

Concentration risk is more visible now than ever. USDT and USDC together still account for the vast majority of stablecoin volume. A regulatory or operational shock at either issuer would ripple through centralized exchanges, decentralized finance protocols, and cross-border remittance corridors. New entrants such as RLUSD from Ripple and USD1 from World Liberty Financial have grown, but they remain a small share of the market.

Censorship and sanctions risk are easy to forget. The Office of Foreign Assets Control (OFAC) can, and does, order U.S.-linked stablecoin issuers to freeze addresses tied to sanctioned individuals or entities. Tether has frozen several billion dollars' worth of USDT at the request of law enforcement. None of that changed under the new administration. OFAC authority sits with Treasury, and Treasury's enforcement posture has been steady across administrations.

Finally, political risk. The very fact that an administration-linked issuer such as USD1 exists creates questions other issuers do not face. If a future administration views that issuer as politicized, it could face retaliatory scrutiny, and so could its users. The lesson of the 2022-2024 period is that enforcement priorities can swing hard with the political weather, and the 2025-2026 period is not immune to the same cycle in reverse.

What the GENIUS Act actually does

It helps to separate the law from the politics. The GENIUS Act does three things that matter for any U.S. reader of this article.

It defines a payment stablecoin. The statute distinguishes stablecoins used for payment from tokenized funds, bank deposits, and securities. Only coins that meet the definition get the federal pathway. Algorithmic stablecoins, the kind that tried to maintain a peg through code rather than reserves, are explicitly excluded from the federal license, which is why the post-TerraUST survivor landscape looks the way it does.

It sets reserve and disclosure rules. A federally licensed issuer must hold backing assets in cash, short-dated Treasuries, and similar low-risk instruments. Reserves must be attested monthly and audited annually. The law also bars paying interest to holders, which is meant to keep payment stablecoins from competing with bank deposits for savings.

It creates a federal license. Non-bank issuers can apply to the OCC for a limited-purpose national trust charter. State regulators can also license issuers under a regime the OCC deems substantially equivalent. The federal license is optional in name only: issuers who skip it lose access to federal preemption and may face a patchwork of state-by-state requirements.

For incumbent issuers, the GENIUS Act is mostly a compliance lift. USDC already publishes monthly attestations from a major accounting firm, so Circle's path to a federal license is comparatively short. USDT is not a U.S. company, so it does not seek a U.S. license at all, which is why the law is widely read as favoring domestic issuers.

SEC, CFPB, and the quiet shift in enforcement

The headline shift in 2025 was personnel. Paul Atkins, a former SEC Commissioner known for lighter-touch regulation, took over as Chair. Within months, the SEC's crypto unit had dropped or paused several investigations, including the long-running case into whether certain stablecoins were unregistered securities. The agency also ended its enforcement action against Coinbase over its staking program, and it pulled back from a series of DeFi-focused probes.

None of this means the Securities Act of 1933 stopped applying. The SEC's official position, restated in 2025 guidance, is that most crypto tokens are not securities, but transactions involving them can still trigger securities law if they look like investment contracts. For stablecoins specifically, the GENIUS Act now occupies the field for federally licensed payment coins, so the SEC has less to do with them. For everything else, the legal floor is the same as it was in 2023.

The Consumer Financial Protection Bureau moved in a similar direction. Under Director Russell Vought, the CFPB withdrew from or paused several crypto-related actions, including a proposed rule that would have extended certain consumer-disclosure obligations to non-bank digital wallet providers. Critics on both sides read this as a giveaway; in practice, the practical exposure of stablecoin users at the federal consumer level was already narrow, since most consumer complaints route through state attorneys general and bank regulators, not the CFPB.

What did not change is worth listing. OFAC sanctions enforcement kept its existing scope, and FinCEN's anti-money-laundering rules still apply to money services businesses, which by the CFPB's own earlier interpretation includes most U.S.-linked stablecoin issuers. KYC and recordkeeping obligations on centralized exchanges stayed in force. The gap between the executive rhetoric of a crypto-friendly administration and the statutory reality on the ground is real, and a reader who acts on the rhetoric alone is likely to overestimate the freedom available.

The unusual case of World Liberty Financial and USD1

Perhaps the most novel development of 2025 is the rise of World Liberty Financial, often abbreviated WLFI, and its USD1 stablecoin. The company was launched with public involvement from members of the Trump family, and a significant ownership stake was sold to Abu Dhabi-based investor MGX, funded in part by a sale of USD1. By mid-2026, USD1 had grown into a top-five stablecoin by circulating supply, and the Trump family's reported share of WLFI token-related paper wealth had drawn both market attention and ethics complaints.

From a policy standpoint, the relevant question is not whether USD1 is technically compliant. The bigger question is what it means for an administration to be both the rule-setter and a beneficiary of one of the rules' main users. Critics, including several Senate Democrats and a lawsuit from Citizens for Responsibility and Ethics in Washington, argued that the arrangement created an unprecedented conflict of interest. Supporters, including many in the crypto industry, argued that it is no different from any other executive with equity exposure, and that the law already requires the President to divest from operating businesses, which WLFI technically is not, since assets are held in a trust managed by the family.

For ordinary users, the takeaway is narrower. USD1 functions as a regular dollar-pegged token on supported chains. It is not, as of mid-2026, federally licensed under the GENIUS Act, though the issuer has signaled it intends to apply. Holding it carries the same reserve, custody, and chain risks as any other stablecoin, and the political risk discussed above is unique to it. The case is a useful illustration of how the 2025-2026 period mixed genuine legislative progress with novelty that has no historical precedent.

State pushback and the preemption fight

Federal preemption is the quiet fight that will shape stablecoin policy for the next several years. The GENIUS Act says that a federally licensed issuer cannot be regulated in conflicting ways by states. New York, which runs one of the most demanding state regimes through BitLicense, has argued that the federal floor is too low, especially on reserves and audits. Several state attorneys general have filed or signaled lawsuits alleging that the Act unconstitutionally displaces state consumer-protection authority.

Texas and a handful of other states have taken the opposite view, arguing that the federal framework is necessary to prevent a 50-state patchwork from driving issuers offshore. The industry has generally lined up behind the federal framework, since a single license is cheaper to operate than dozens.

Two practical consequences follow for readers. First, if you hold or transact in stablecoins from a non-federally licensed issuer, your state of residence may matter more than it has in years, especially if your state adopts rules stricter than the federal floor. Second, the preemption cases will probably reach the Supreme Court by 2027 or 2028, and a decision narrowing federal preemption would force issuers to refile in multiple states, which in turn would likely push some smaller issuers out of the U.S. market entirely.

What this means if you actually use stablecoins

Pull the politics out and the practical advice for an American stablecoin user in 2026 is not very different from 2024. Use issuers that publish regular third-party attestations. Prefer coins that hold reserves in cash and short-dated Treasuries rather than commercial paper, loans, or volatile crypto. Keep in mind that holding a stablecoin on a centralized exchange is functionally a custodial claim on that exchange, not a direct claim on the issuer, and exchange failures have historically treated customers as general unsecured creditors.

If you move money across chains, expect to pay a small bridging fee, and treat bridges as their own risk category. Several of the largest crypto hacks in history were bridge exploits, and a stablecoin that survives a reserve shock can still lose value if the bridge moving it does.

Finally, do not mistake a friendlier executive branch for a permissionless regime. Federal licensing is the new gate, not the absence of one. The GENIUS Act, the unchanged OFAC and FinCEN rules, and the unresolved preemption cases together mean that the U.S. stablecoin market in 2026 is more formally regulated than it has ever been, just under a different framework than the one that came before.

Follow stablecoin policy the smart way

Stablecoin policy moves fast, and so does the news around it. Tracking enforcement actions, congressional amendments, state lawsuits, and new issuers manually is a losing game for anyone who is not paid to do it full time. Zippfeed surfaces stablecoin and broader crypto headlines with sentiment scoring that flags whether a story is bullish, neutral, or bearish, and an importance rating that helps you separate signal from noise, so you can react to real regulatory shifts instead of rumor cycles.