The New Stablecoin Rulebook Would Exclude US$20 Billion in Backing. Nearly 1 in 5 Dollars Outside Tether.
The GENIUS Act does more than require a stablecoin to hold a dollar for every dollar issued. It defines a closed list of what that reserve may be — cash, insured deposits, short-dated Treasury bills, overnight government repos — and by drawing the list, it excludes three ways a large part of the onchain-dollar market already backs itself: crypto collateral held in excess, a synthetic futures hedge, and tokenized real-world assets. Measured against live supply, about US$20 billion of dollar stablecoins is built on a mechanism the list leaves out. Set aside offshore USDT, which answers to a separate track, and that is nearly one dollar in five.
- The GENIUS Act's reserve rule is a closed list, not a floor: a payment stablecoin may hold cash, insured deposits, Treasury bills of 93 days or less, overnight government repos, and government money-market funds — and nothing else. The consequential part is what the list leaves out (as of Sep 2026).
- About US$20 billion of dollar stablecoins is backed by a mechanism the list excludes: crypto collateral held in excess (Sky's USDS US$6.8B, DAI US$4.6B, and others), a delta-neutral synthetic hedge (Ethena's USDe US$4.7B), or tokenized real-world assets (Usual's USD0 US$0.5B). That is about 7% of the nearly US$294 billion dollar market.
- Most of the dollar market is USDT, issued offshore and awaiting a separate reciprocity determination — a different track from a US payment permit. Among the dollar stablecoins that would actually pursue that permit, the excluded-mechanism share rises to about 18%: nearly one dollar in five is built on a model the eligible-asset list does not cover.
Revised October 5, 2026: figures corrected.
The GENIUS Act is usually summarized in four words: back every dollar. A payment stablecoin must hold one dollar of reserve for every token it issues. That much is intuitive, and most of the market already does it. The part that will reshape the market is quieter and more exacting: the Act does not only say how much reserve to hold, it says what the reserve may be. Cash. Insured bank deposits. Treasury bills maturing within 93 days. Overnight government repurchase agreements. Government money-market funds. That is the list, and it is closed. Everything not on it is out — and a meaningful part of the onchain-dollar market is built on things that are not on it.
Weigh the dollar-stablecoin market by what actually backs each dollar, rather than by the peg they all hold, and three backing mechanisms fall outside the list. The largest is crypto collateral held in excess of the tokens issued: DAI and Sky’s USDS are the anchors, joined by GHO, USDD and Falcon’s USDF. The second is a synthetic hedge with no cash reserve at all — Ethena’s USDe, which stays near a dollar by holding staked crypto and shorting an equivalent amount of futures. The third is tokenized real-world assets standing in for cash, the model behind Usual’s USD0. Together they account for about US$20 billion.
Fig. 1
Weighed by what backs each dollar, US$20B of the market sits outside the eligible-asset list.
Dollar-stablecoin market value (US$ billions) grouped by whether the backing mechanism appears on the GENIUS Act's eligible-asset list. The cash-and-Treasuries model (more than US$88B) is the list's core. Three mechanisms fall outside it: crypto collateral held in excess (US$14.8B), a synthetic futures hedge (US$4.7B) and tokenized real-world assets (US$0.5B). USDT (US$183B), issued offshore, sits in a separate foreign-issuer track the Treasury has not yet ruled on. Every token in every group trades at one dollar.
Set against the whole dollar market, US$20 billion is about 7% — a small share of a nearly US$294 billion total. But that total is dominated by a single name. USDT, at about US$183 billion, is issued offshore, and the Treasury has not made the reciprocity determination that would let a foreign issuer serve US businesses under the Act. USDT is not on the excluded list and it is not on the eligible list; it is on a different track entirely. Remove it, and the denominator that remains — the dollar stablecoins that would actually seek a US payment permit — is about US$110 billion. Against that set, the excluded-mechanism share is about 18%. Nearly one dollar in five among the coins the rulebook is written for is built on a model it does not cover.
Excluded is not the same as unbacked
The distinction the list draws is about the reserve model, not about soundness, and the two are easy to conflate. The coins outside the list are not thinly backed. DAI and USDS hold collateral worth more than the tokens they issue, visible onchain, and both route a portion of their reserves into short-term Treasuries through their own protocols. USDe publishes its hedge and its backing frequently, in some cases daily. What the Act does is narrow: it declares that overcollateralized crypto, a futures hedge, and tokenized assets are not permitted as the reserve of a payment stablecoin, regardless of how well provisioned they are. A coin can be sound and still sit outside the definition. Several here do.
That is why the number is a map of the built market, not a scorecard. These mechanisms were not designed against the Act; most predate it. They answered a different question — how to hold a dollar without a bank, or without a custodian, or with a yield the issuer keeps. The GENIUS list answers a narrower one: what a dollar sold as a payment instrument to Americans may rest on. Where those two questions diverge is exactly where the US$20 billion sits.
The choice the list forces
For the issuers on the outside, the rulebook narrows the options to three. Restructure the reserve onto the eligible list, . Stay as they are and live outside the payment-stablecoin definition — usable in DeFi, as collateral, as a yield instrument, but not marketed to Americans as a regulated dollar. Or split the difference with a compliant wrapper alongside the existing token. None of those is free, and each reshapes what the coin is for. The eligible-asset list, in other words, does not just admit coins; it sorts them.
Why this matters now
On August 17, the Treasury published its proposed rules defining who may issue or sell a payment stablecoin and who must comply, including foreign issuers. The Act's eligible-asset list is the reserve standard those rules build on. Until now, the market has sorted itself on backing models by convention and preference; the rules turn that convention into a legal boundary with a date attached. The map above is where the market stands the week the boundary was drawn.
The share to watch, then, is not the peg — every coin here holds a dollar today, and will until one of them doesn’t. It is how much of the built dollar market moves onto the eligible list, how much steps outside the payment definition on purpose, and how much leaves the US market. Nearly one dollar in five among the coins the Act is written for now faces that sort. Which way it goes will say more about what an onchain dollar becomes than any single issuer’s market cap.
A permitted payment stablecoin issuer may hold only US coins and currency, insured demand deposits, Treasury bills with 93 days or less remaining maturity, overnight Treasury repurchase agreements, and government money-market funds. Corporate bonds, commercial paper, precious metals, secured loans and crypto collateral are not eligible. The Aug 17 2026 Treasury proposed rulemaking defines who may issue or sell under this standard.
GENIUS Act — S.1582, 119th Congress (text)Seven dollar stablecoins are backed by a mechanism outside the eligible-asset list: crypto held in excess (Sky's USDS US$6.8B, DAI US$4.6B, USDD US$1.3B, Falcon's USDF US$1.3B, GHO US$0.8B), a delta-neutral futures hedge (Ethena's USDe US$4.7B), and tokenized real-world assets (Usual's USD0 US$0.5B). About US$20B in total — about 7% of the nearly US$294B dollar market, about 18% once offshore USDT is set aside. Classification cross-checked two independent ways; none of the seven reports a cash-and-Treasuries reserve.
Verified Sep 15, 2026 · onchainbenchmark.com/methodologyUSDT (about US$183B on the issuer's own attested circulating basis, the majority of the dollar market) is issued offshore; the Treasury has not made the reciprocity determination that would let a foreign issuer serve US businesses under the Act. We treat it as a separate track, not as part of the US$20B.
Tether — transparency / reserves- What does the GENIUS Act say a stablecoin's reserves can be?
- The Act sets a closed list. A permitted payment stablecoin may hold US coins and currency, insured demand deposits at banks, Treasury bills with 93 days or less of remaining maturity, overnight Treasury repurchase agreements, and government money-market funds. Assets not on the list — including corporate bonds, commercial paper, precious metals, secured loans and crypto collateral — are not eligible. The consequential part of the rule is not the 1:1 requirement but what the list leaves out.
- How much stablecoin backing does the eligible-asset list exclude?
- About US$20 billion of dollar stablecoins as of September 2026 — about 7% of the nearly US$294 billion dollar market. That is the value backed by a mechanism outside the list: crypto collateral held in excess (DAI, Sky's USDS and others), a delta-neutral synthetic hedge (Ethena's USDe), or tokenized real-world assets (Usual's USD0). Once offshore USDT is set aside as a separate track, the excluded-mechanism share of the US-addressable market rises to about 18%.
- Does 'excluded' mean these stablecoins are unsafe or unbacked?
- No. Excluded means the Act does not permit the backing mechanism as the reserve of a payment stablecoin, not that the coin is thinly backed. DAI and USDS are overcollateralized and hold real Treasuries through their protocols; USDe publishes its hedge frequently. A coin can be sound and still sit outside the payment-stablecoin definition. The figure measures how much of the market uses a model the list leaves out, not how much is at risk.
- Why is USDT counted separately rather than as excluded?
- USDT is issued offshore, and the Treasury has not made the reciprocity determination that would let a foreign issuer serve US businesses under the Act. It is neither on the eligible list nor in the excluded-mechanism set; it is on a distinct foreign-issuer track with its own pending decision. Because it is about US$183 billion — the majority of the dollar market — folding it into either bucket would distort the picture, so we report the market both with and without it.
- Why does this matter now?
- Because the boundary just became legal. On August 17, 2026 the US Treasury published proposed rules defining who may issue or sell a payment stablecoin, and the eligible-asset list is the reserve standard they build on. Until now the market sorted itself on backing models by convention; the rules turn that into a dated legal line. The share of the built market that moves onto the list, steps outside the definition, or leaves is the number most likely to move next.