Treasury to Release Final Stablecoin Rule on Jan. 2, Requiring Fed Master Accounts for Issuers Over $1 Billion, Sources Say

The Rule and Its Timing

The Treasury Department will publish a 147-page final rule in the Federal Register at 9 a.m. Eastern Time on Jan. 2, 2026, requiring every U.S. dollar-backed stablecoin issuer with more than $1 billion in outstanding tokens to obtain either a Federal Reserve master account or a restricted-purpose national trust charter and to hold reserves in cash or U.S. Treasury securities at a Federal Reserve Bank, according to two Treasury officials familiar with the matter and a bank compliance officer familiar with the rulemaking. The rule, jointly drafted by the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network, will take effect Feb. 15, 2026, with full compliance required by July 1, 2026. Treasury Secretary Scott Bessent signed the final version on Dec. 27 after a 4 p.m. meeting in the Cash Room of the Freedman's Bank Building, the officials said.

A lobbyist briefed on the draft said the text was locked Dec. 23 following a closed-door review at the Treasury Department's main headquarters on Pennsylvania Avenue. The rule applies to any token marketed or operated as a stablecoin pegged to the U.S. dollar, including tokens issued by offshore entities that serve U.S. residents or clear transactions through U.S. banks. Issuers above the $1 billion threshold must maintain reserves equal to 100 percent of outstanding token value, with at least 80 percent held in cash or Treasury bills at a Federal Reserve Bank and the remainder in segregated accounts at insured depository institutions. The lobbyist said the final rule drops an earlier proposal to allow commercial paper holdings and instead limits reserve assets to cash, Treasury securities, and overnight reverse repurchase agreements.

The compliance officer, who works at a top-twenty U.S. bank, said institutions are preparing to file a new daily report, designated Form FR 3144, through the Federal Reserve's Fedwire system by 9 a.m. Eastern Time each business day. The report will disclose reserve account balances, the number of tokens issued and redeemed in the prior twenty-four hours, and the identity of the Reserve Bank holding the assets. Issuers must also submit monthly audited attestations prepared by public accounting firms registered with the Public Company Accounting Oversight Board. The official said the Treasury chose the $1 billion threshold because three major issuers, Circle Internet Financial, Tether Holdings Limited, and PayPal Holdings Inc., each exceeded that mark throughout the fourth quarter of 2025.

Sanctions, Foreign Issuers, and the CBDC Provision

The final rule will create a new regulatory category called a foreign digital asset transmitter and will authorize Treasury to impose secondary sanctions on non-U.S. stablecoin issuers whose tokens are knowingly used to facilitate sanctions evasion, according to one of the Treasury officials. The Office of Foreign Assets Control plans to publish a companion advisory Jan. 3 identifying high-risk jurisdictions and wallet addresses linked to sanctioned actors, the official said. Foreign issuers that want continued access to the U.S. market must register a domestic subsidiary, maintain a physical office inside the United States, and designate a chief compliance officer based in the country. The rule grants a thirty-day wind-down period for existing arrangements that violate the new restrictions.

The bank compliance officer said major correspondent banks expect to suspend dollar-clearing services for unregistered issuers by March 1, 2026, to avoid exposure under the Bank Secrecy Act. The rule also directs the Federal Reserve Board to establish a pilot settlement layer for wholesale central bank digital currency redemptions by June 30, 2026, though it explicitly prohibits a Federal Reserve-issued retail digital wallet for consumers. The lobbyist said the Chamber of Digital Commerce and the Blockchain Association have retained counsel at Gibson, Dunn and Crutcher and are weighing a lawsuit to block the rule before it takes effect. A separate draft interpretive letter from the Office of the Comptroller of the Currency, expected Jan. 6, will clarify that national banks may custody stablecoin reserves under existing fiduciary powers.

Two Treasury officials said the rulemaking includes a safe harbor for issuers with less than $500 million in circulation and a modified compliance schedule for issuers between $500 million and $1 billion. Smaller issuers must file quarterly reports instead of daily reports and may hold reserves at insured state-chartered banks rather than at a Federal Reserve Bank. The officials said FinCEN will issue concurrent guidance requiring all stablecoin issuers, regardless of size, to register as money services businesses by March 15, 2026, and to maintain transaction monitoring programs modeled on those used by money transmitters. The lobbyist said industry lawyers expect the $1 billion threshold to force consolidation because only the largest issuers can afford the compliance costs of a master account.

Market Impact and What to Watch

Analysts at multiple Wall Street firms estimate that roughly $220 billion in outstanding stablecoins will fall under the rule's coverage when it takes effect. Circle, issuer of USDC, operates a New York trust charter and is considered closest to compliance, while Tether, which issues USDT primarily from El Salvador and the British Virgin Islands, faces the largest operational challenge, according to the bank compliance officer. PayPal's PYUSD, issued through Paxos Trust Company, will likely require a restructuring of reserve custody arrangements. The compliance officer said at least two regional banks have halted pilot programs with stablecoin issuers until they can confirm the final reserve requirements.

The next 48 to 72 hours will bring the formal Federal Register filing, a Treasury press release, the OFAC advisory, and likely emergency motions or statements from trade groups. Watch for a possible lawsuit filed in the U.S. District Court for the District of Columbia by Jan. 5, responses from House Financial Services Committee Chairman French Hill, and guidance from the Securities and Exchange Commission on whether certain stablecoins qualify as securities. The rule could accelerate the entry of traditional banks into digital payments, strengthen the role of the dollar in tokenized finance, and push offshore issuers either to register or to exit the U.S. market entirely. The decision also sets up a broader fight over financial surveillance, privacy in peer-to-peer transactions, and the federal government's power to regulate programmable money.