The CFTC has expanded its definition of payment stablecoins to include National Trust Banks

Definition of Stablecoin from CGTC

The Commodity Futures Trading Commission (CFTC) has officially expanded its regulatory definition of payment stablecoins to explicitly include stablecoins issued by national trustee banks licensed under the Office of the Monetary Control (OCC) , according to a report from Bloomberg Law and an explanatory letter from CFTC staff .

This clarification resolves long-standing ambiguity and brings the CFTC's position closer to the OCC and the GENIUS Act (2025) , which established federal rules for issuers of payment stablecoins. This move is widely seen as a practical step toward reducing regulatory fragmentation and providing a clearer line of jurisdiction between the CFTC and the SEC .

Key takeaways from the CFTC's Explanatory Letter

Updated definition: Stablecoin payments now include any digital asset that is pegged to a fixed monetary value (typically 1:1 with USD).

• Can be exchanged upon request at face value.

• Issued or secured by a national trust bank or equivalent entity licensed by the OCC.

• Primarily functions as a means of payment or settlement.

Stablecoins issued by national trust banks licensed by the OCC (e.g., Circle's new national trust license, Paxos National Trust ) are primarily under the OCC's oversight regarding reserve, custody, and exchange rules, while the CFTC retains control over derivatives and futures contracts referencing those stablecoins.

The letter clarifies that existing issuers licensed by the OCC do not need to register as commodity fund operators or swap dealers simply because their stablecoins can be used in the derivatives market.

For national trust banks, this expanded definition opens up opportunities to issue stablecoins for payment, settlement, and treasury management activities within a clearer legal framework. This could spur bank-led initiatives in tokenized cash, on-chain settlement systems, and real-time payments—especially for institutional clients.

Signs of regulatory convergence

The CFTC's move reflects a broader trend toward regulatory convergence between traditional finance and digital assets. As more U.S. agencies refine their positions, the distinction between “ cryptocurrency ” and “ banking ” is giving way to a more functional approach—focusing on the function of a tool, rather than its inventor.

Introducing national trust banks will intensify competition in the stablecoin market. Bank-issued stablecoins can be attractive to institutions that prioritize regulatory certainty, balance sheet strength, and direct exchangeability. At the same time, cryptocurrency issuers retain advantages in speed, global reach, and integration with DeFi.

Assessment and Conclusion

The CFTC's decision to officially include nationally trustee-issued stablecoins in its definition of payment stablecoins is a practical and positive step for the market, helping to reduce confusion about jurisdiction and strengthen the legal foundation for US-based stablecoins.

For issuers like Circle (now licensed by the OCC) and Paxos, this is a significant win: clearer federal oversight, reduced overlapping risks, and enhanced institutional credibility. For the broader stablecoin and tokenized asset ecosystem, this signals continued maturity – regulated digital dollars are increasingly seen as financial products within established banking frameworks, rather than novel cryptocurrency experiments.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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