Original article fromBank Policy Institute (BPI, Bank Policy Institute; authors Laurence Bristow, Eva Funaki
Editor's note: This article is compiled from a BPI research note. BPI is a research institution representing the U.S. banking industry, and its conclusions are unfavorable to offshore stablecoins and crypto-collateralized stablecoins; readers should be aware of its stance. Data is as of June 30, 2026, sourced from issuer disclosures and Dune Analytics.
On January 18, 2027, the GENIUS Act officially takes effect. Under the Act, "payment stablecoins" issued in the United States or offered to U.S. users must be fully reserved with highly liquid assets—U.S. Treasury securities with a remaining maturity of no more than 93 days, overnight reverse repurchase agreements collateralized by Treasuries, bank deposits, and other qualifying assets.
But by circulating supply, among the ten largest dollar stablecoins in the United States, currently only two have reserve structures that match GENIUS requirements, accounting for 26% of total circulating supply. Another two are expected to qualify soon, accounting for 2%. The remaining 72% do not qualify: 65% of that are offshore-issued stablecoins, and 7% are crypto-collateralized.
These are the conclusions of BPI's latest research note.
Sample and Methodology
BPI selected the 10 largest dollar stablecoins by circulating supply, which as of June 30, 2026 together accounted for 97% of total market circulating supply. Reserve composition data typically comes from issuers' monthly disclosures, with the largest, USDT, disclosing only quarterly; the crypto-collateralized USDS and DAI draw data on-chain via Dune Analytics.
These ten are divided into three groups: those subject to GENIUS after the Act takes effect, those not subject because they are issued offshore, and those not subject because they use crypto-collateralized loans as reserves.
The ten largest dollar stablecoins grouped by category (circulating supply and compliance status)
The Compliant 26%: USDC and PYUSD
Four of the ten are issued within the United States and will be subject to GENIUS after the Act takes effect. As of June 2026, Circle's USDC and Paxos's PYUSD already meet reserve asset requirements; World Liberty's USD1 and Ripple's USD do not—both hold money market funds, and these funds contain agency debt and longer-maturity U.S. Treasuries.
USDC is the largest domestic one, with circulating supply exceeding $73 billion. In July 2026, about 70% of its reserve assets were reverse repurchase agreements collateralized by Treasuries, with the remaining 30% split roughly evenly between uninsured bank deposits and Treasury bills.
Time series of USDC reserve asset composition (annotated with changes around the 2023 Silicon Valley Bank event)
USDC's reserve structure was reshaped by the Silicon Valley Bank crisis in early 2023. Initially its reserves were 85% Treasury bills plus 15% uninsured bank deposits, with more than half of the deposits held at Silicon Valley Bank. After the bank ran into trouble, USDC holders began to question its solvency, the coin price depegged, falling to as low as 87 cents. Thereafter Circle reduced the Treasury bill proportion and shifted to investing in reverse repurchase agreements collateralized by Treasuries to improve liquidity.
The Non-Compliant Bulk: The Offshore 65%
The major offshore-issued stablecoins are not within GENIUS's jurisdiction, and their reserve structures do not match the Act's requirements.
The largest is USDT, currently the number one stablecoin by circulating supply, with its operating entity located in El Salvador. As of June 30, 2026, 61% of USDT reserves were U.S. Treasury bills, 10% were overnight reverse repos collateralized by Treasuries, and bank deposits accounted for a very small portion. The remaining reserve assets consist of gold, listed equities, Bitcoin, secured loans, term reverse repo loans, and other investments, whose share has risen to 29%, and these proportions are slowly increasing over time.
Changes in USDT reserve asset composition
USDT has depegged multiple times: in October 2018, it fell below par when the market questioned its reserve assets; in November 2022, it depegged again amid the FTX collapse and contagion fears; in August 2023, during the "crypto winter," exchange liquidity fell and redemptions on Tether's side were blocked, and the coin price depegged once more.
The second-largest offshore stablecoin, Global Dollar (USDG), is issued by Paxos's Singapore and Europe entities. As of June 30, 2026, its reserve composition was 53% government money market funds, 42% Treasury bills, and 5% bank deposits. These assets are themselves not high-risk, but government money market funds invest in Treasury bills and federal agency securities with maturities exceeding 93 days, so they do not meet GENIUS requirements. Shortly after USDG launched, it depegged in November 2024 due to insufficient trading liquidity.
The GENIUS Act also leaves a channel for foreign payment stablecoin issuers: provided that the U.S. Treasury determines their home country's regulatory regime is comparable to that of the United States and the issuer demonstrates its ability to comply with U.S. legal orders, they may offer payment stablecoins to U.S. users.
The Crypto-Collateralized 7%: USDS, DAI, and USDe
Crypto-collateralized stablecoins have higher-risk reserve portfolios, mainly crypto-collateralized loans, and these are not qualifying reserve assets under GENIUS, so they are not expected to become payment stablecoins under the Act.
The most prominent of these are USDS and DAI, both issued by Sky Protocol, which together constitute the third-largest stablecoin, with a scale approaching $14 billion.
Unlike payment stablecoins backed 1:1 by real assets, USDS has three minting paths: directly exchanging 1 USDC for 1 USDS; borrowing USDS against crypto collateral through Sky's DeFi lending protocol; and minting by Sky's affiliated entities—Sky provides USDS credit lines to affiliated entities for strategies such as crypto-collateralized loans or tokenized real-world assets.
Composition of USDS reserve assets (July 2025 to June 2026)
As of June 2026, USDS reserves consisted of 42% crypto-collateralized loans, 38% stablecoins, and 20% tokenized real-world assets. Of the real-world assets, nearly 90% are tokenized funds invested in short-term U.S. Treasuries, reverse repurchase agreements, and AAA-rated mortgage-backed securities.
Another crypto-collateralized stablecoin is Ethena Lab's USDe, at approximately $4 billion as of June 2026. USDe started with a hedge-fund-style basis trade strategy, but adjusted its strategy after declining basis trade profitability and a severe depeg in October 2025; it is currently backed by a combination of tokenized real-world assets, yield-bearing stablecoins, and crypto-collateralized loans on DeFi protocols.
Conclusion: Compliance Does Not Equal No Depeg
GENIUS's reserve asset requirements are intended to improve the stability of payment stablecoins and reduce the probability of depegging. But as things stand, only two of the ten largest dollar stablecoins—26% of global circulating supply—have reserves that comply with the bill's requirements. The offshore stablecoins and crypto-collateralized stablecoins that account for the bulk remain outside the new legal framework, holding significantly riskier reserve portfolios.
Of course, meeting GENIUS reserve requirements does not mean a stablecoin will necessarily maintain its value—both compliant and non-compliant stablecoins have depegged before, and may depeg again in the future.
