CFTC Expands Eligible Stablecoin Issuers to Include National Trust Banks

The Commodity Futures Trading Commission has formally updated its guidance to make clear that national trust banks may issue fiat-pegged stablecoins under the agency's payment-stablecoin framework. By reissuing and expanding a prior staff letter, the CFTC removed ambiguity that had left some custodial banks outside the agency's explicit definition of eligible issuers. This clarification arrives after Congress enacted the GENIUS Act, which established federal guardrails for dollar-backed tokens and narrowed permitted designs to ones backed by short-term government securities or cash-like deposits. Regulators have signaled a coordinated approach: the FDIC separately proposed a structure for commercial banks to run stablecoin operations through regulated subsidiaries subject to supervisory review. Together, these developments create a compliance path for banks that provide custody or asset-management services but do not offer traditional retail accounts, enabling them to tokenise dollar liabilities while meeting prescribed collateral and redemption standards. The regulatory text emphasizes overcollateralization and liquid, high-quality backing assets, explicitly excluding algorithmic or synthetic dollar designs that lack full fiat support. For national trust banks, this opens a potential new product and custody business while imposing clearer capital, governance and audit expectations. Market participants should expect increased scrutiny on reserve composition, redemption mechanics and operational controls as enforcement and supervisory regimes mature. The alignment of CFTC guidance with bank-focused proposals reduces legal uncertainty for institutional entrants but also concentrates demand for short-term Treasuries and similar safe assets to back tokens. At the same time, legislative and political dynamics in Washington remain unsettled: recent withdrawals of industry endorsements and stalled or rescheduled committee markups underscore that a narrowly targeted statutory settlement is not yet assured. White House-led technical convenings and interagency engagement between the SEC and CFTC aim to smooth differences, but bargaining over jurisdictional lines, confirmation-driven leverage and committee-level compromise could delay or condition wider statutory clarity. Industry reaction is mixed — some firms continue to pause major launches while others press ahead — and international regulatory developments, such as the EU's MiCA, continue to shape commercial decisions. Longer term, clearer issuer definitions could spur competitive offerings from bank-affiliated stablecoins, reshape custody relationships, and shift balance-sheet management for institutions seeking to bridge traditional banking and tokenised payments. The net effect is conditional: it lowers legal friction for compliant bank participation but raises the bar for risk management, transparency and regulator oversight across the stablecoin ecosystem.