The Stablecoin Banker, May 26

May 26, 2026

3 stablecoin developments bankers should know about

Welcome to the latest edition of The Stablecoin Banker, a periodic newsletter from the team at Omnia to help the banking community stay on top of the most relevant stories in the stablecoin industry. We highlight top stories that are relevant to banks, with our insights and commentary to draw out the most important conclusions.

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In This Issue

• The regulatory window was open, and now it has been blown off its hinges
• JPMorgan's new tokenized fund moves us past "bridging" fiat and digital assets — into a world where they're fully merged.
• Circle and Anchorage built a banking stack for AI agents — without a depository bank.

Trickle to Torrent: Regulatory Change Keeps Coming

On May 19, President Trump signed an executive order directing all federal financial regulators — including the OCC, FDIC, CFPB, SEC, NCUA, and CFTC — to identify ways to facilitate innovation by fintech firms, particularly small and emerging ones, and to streamline chartering and licensing processes within 90 to 180 days. The order separately instructs the Federal Reserve to define its legal authority to grant payment account access to uninsured depository institutions and non-bank financial companies, and to submit a report within 120 days. One day later, the Fed released a request for comment on a formal proposal to establish the payment account. The same week, the Senate confirmed Kevin Warsh — who has many personal investments in stablecoins and crypto — as Federal Reserve chair. Meanwhile, Augustus received conditional OCC approval to charter Augustus Bank, N.A., billed as the world's first clearing bank for the AI era, with a stablecoin and AI-native core. At Consensus Miami earlier this month, Anchorage Digital CEO Nathan McCauley said the company has "a dozen to maybe as many as 20" institutional and large tech company issuers in its stablecoin pipeline since GENIUS Act passage. Sources [The Block, Fortune, CoinDesk, CNBC, Federal Reserve]

My Take:

Four weeks ago, I called the PACE Act an intention-setting first draft — specifically because its centerpiece, a 'payments reserve account,' didn't yet exist. I was a bit skeptical of its chances, but the Fed's May 20 proposal fills that gap. The product is now real, even if the comment period hasn't closed. More importantly, the move under the outgoing Fed chair, tells us that the Fed may no longer be the ultimate roadblock for fintech innovation. Recall that it was only 3 years ago that Custodia was suing the Fed for master account access. Contrast that with the proposal that would grant purpose built accounts to insured banks, uninsured banks, and even non-banks.

That the payment account announcement and the White House EO were one day apart feels more coordinated than coincidental. The content of the EO strongly hints at a strategy to consolidate Fed decisionmaking in Washington by requesting the Fed to report on the actual legal authority of the 12 Federal Reserve Banks "to act independently of the FRB in granting or denying access to Reserve Bank payment accounts and payment services." This would address the spiderman meme problem that exacerbated Custodia's inability to get master account access.

Add to the EO timing the background of the incoming Fed chair. Warsh holds personal investments in crypto fund Bitwise, stablecoin startup Basis, and crypto-oriented venture firm Electric Capital. A 54-45 Senate confirmation vote reflects exactly how close he came to failing on that basis, and adds to the urgency with which he may act along with all of the federal regulators as the clock ticks down to midterms and the 2028 presidential election. Regulators understand that they have a unique window of opportunity, and are rushing to build enough momentum that an incoming administration will not be able to unwind all of their changes.

I remain astonished by the pace of regulatory change. Bankers are realizing this as well: on a call with a community bank this week, a CxO told me "this thing's not slowing down on any front, whether it's adoption, legislation, whatever. It's not slowing down."

Firms are actively pursuing the opportunity presented by the new regulatory frameworks and receptivity. The threat to banks is growing: Anchorage has a 20-firm pipeline for new stablecoin issuers, which will be empowered by the CLARITY Act yield compromise. Bank charters are being granted, and not just to crypto banks - Nubank, bunq, and Mercury are all approved or in the queue. All of these companies built their own core systems. I've come to deeply understand how the spaghetti bowl of multi-vendor legacy tech completely hobbles 99% of banks from building modern banking experiences. Making a single change can require multiple vendor interactions. Banks that built their own systems can operate much more efficiently than the average American bank: Column (already a bank) operates with a 38% efficiency, while Nubank just hit 17.6%, compared to the 56% average for US banks. These numbers should make the average bank CEO's eyes water, even when adjusting for the fact that the new entrants avoid the cost of physical locations by being digital-only.

If I were a bank CTO, I'd be asking myself how I can create a strategy that replaces my entire tech stack with modern software, built in-house (hard) or simply bought from another bank or new core. It's a BHAG, but it's one that banks need to take on if they want to thrive in the next 10 years.

R.I.P Bridging - Hello Meshing

J.P. Morgan Asset Management filed to launch JLTXX, the JPMorgan OnChain Liquidity-Token Money Market Fund. The fund is explicitly designed to serve as a reserve asset for stablecoin issuers under the GENIUS Act, and the fund allows investors to mint and redeem fund shares in-kind directly using stablecoins. On May 13, Moody's simultaneously assigned its top Aaa-mf rating to Fidelity International's FILQ fund and BlackRock's BUIDL fund. The CLARITY Act, which bans stablecoin rewards "economically or functionally equivalent" to deposit interest but preserves rewards for trading, transactions, and staking, cleared the Senate Banking Committee 15-9 on May 14 with two Democrats joining Republicans, advancing toward a full Senate floor vote. Sources [Bloomberg, The Block, Yahoo Finance]

My Take:

Two weeks ago, I argued that "yield finds a way" — that the CLARITY Act's platform activity carve-out preserved a functional path for stablecoin rewards regardless of how the prohibition text is written. JLTXX is additional confirmation of that thesis, and it comes from the largest U.S. bank on a public permissionless blockchain. Its embedded hybrid fiat-stablecoin feature points to the future of a hybrid fiat-tokenized financial system.

The structure is worth understanding precisely. The fund is being built as a hybrid fiat-tokenization vehicle: It can be held directly by stablecoin issuers as a reserve asset (that Moody's is rating tokenized funds AAA-mf makes this even easier), issuers can use it for in-kind mint/redeem, and fund investors can use stablecoins or fiat to mint/redeem fund shares. This mix-and-match capability seems confusing at first, but step back and see that this design abstracts the rails from the assets. Have a stablecoin and want a MMF? No problem. Have a bank deposit, want a fund share? No problem. Have a stablecoin and want a bank wire? No problem. For years, we've talked about "bridging" fiat and digital assets rails. We're moving beyond that now. We are merging them together and this is what it will look like.

The ability for an issuer to hold this fund as a permitted reserve asset under GENIUS means they can enable instant on-chain mint/redeem. An eligible JLTXX investor can hold fund shares on-chain in tokenized form when they want yield, and seamlessly mint stablecoin with those shares when they want to transact. This is better for issuer liquidity management because the issuer can redeem with cash or JLTXX. It's better for the system because there's less run-risk if holders can get a government instrument immediately in any volume. It's better for holders because they can swap the non-interest bearing stablecoin (per GENIUS) to an interest bearing asset at any time. The institutions that don't benefit are the ones that make money taking a toll on the existing rails in and out of the stablecoin (read: banks). There's also a pro/con for the issuer offering instant on-chain liquidity. This compelling feature may increase interest in the stablecoin, but instant liquidity reduces the need to hold the stablecoin. The market will find a balance point in time.

The concept underlying these developments is composability. When every asset lives on shared infrastructure, the walls between asset classes come down. Cash, fund shares, and government securities can move between each other without touching fiat settlement systems at all. The tokens representing these different types of assets all move on the same rails and run through the same software (wallets can hold any kind of token, smart contracts can process any kind of token). Tokenization breaks down the barriers that make it hard or impossible for disparate asset classes to interact. That opens opportunity not just for efficiency, but moreover for new financial products.

There are three practical messages for community and regional banks. First, the yield prohibition was never going to stop value delivery to stablecoin holders. JPMorgan, Fidelity, and BlackRock are building the infrastructure to prove it. Second, we are entering the era of meshing fiat and tokenized systems together. Third, it's mind bending at first, but with exposure and time under tension, you can build the muscle to understand it and then leverage it for your own growth. The risk of waiting to get those repetitions in is rising rapidly even though you can still reasonably justify non-action because "my customers aren't asking for [stablecoin/tokenized deposits/digital assets]". Because the world is moving so fast, you cannot wait for the rulebooks to get written. By then, they will be outdated. The only way to learn now is to get your hands dirty.

Circle and Anchorage Bring Banking to Agents

Anchorage Digital and Google Cloud jointly announced "Agentic Banking," positioning the federally chartered digital asset bank as the "operating layer for AI and capital" — the first bank explicitly designed to serve AI agents as primary customers, offering stablecoin custody and settlement services built to operate at machine speed and scale. Circle launched Circle Agent Stack, a suite of pre-built financial infrastructure components for AI agents including payment routing, compliance tooling, and settlement primitives built around USDC, designed to allow developers to add autonomous payment capabilities to AI agents without building financial infrastructure from scratch. Together, the announcements describe a full banking stack emerging specifically for the agentic economy. The Coalition for Financial Ecosystem Standards released a paper that takes on questions of liability and authority in agentic payments, bringing a regulatory lens to this emerging category. Sources [Anchorage, Circle, CFES]

My Take:

The agentic payments buildout has moved from the rails layer — protocols, marketplaces, transaction volume — to the institutional layer: who becomes the "bank" that agents actually operate through. Circle productizes the payment rails; Anchorage pairs a federal charter with AI infrastructure to provide the institutional credibility. Together, they're assembling everything an agent operator needs — without a depository bank in the stack.

I've argued since last fall that agentic payments will route through stablecoins for machine-to-machine transactions, and the last two weeks added the institutional layer to that picture. The developments are important because while the language around agentic payments implies fully autonomous decision-making and purchasing, the benefits don't require it. Machine-to-machine simply means the computers can negotiate payment methods, prices, rewards at time of purchase. Humans can still approve. The CFES paper confirms the structural point: when an AI agent transacts on a consumer's behalf, someone upstream bears the duty of care. Their framework — verification, authority, responsibility — maps onto what banks already do when a customer authorizes third-party account access. The accountable entity in an agentic payment flow is, in structure, a bank.

CFES scoped its analysis to card and ACH rails, flagging that stablecoin payments sit outside the Reg Z and Reg E consumer protection regime. That sounds like a gap, but for machine-to-machine transactions, it's the feature. API calls don't need chargebacks. The lightweight settlement that makes stablecoins economically viable for small-ticket agent transactions is precisely what puts them outside the consumer protection overhead designed for credit cards.

Circle and Anchorage are both making a bid to be the accountable institution at the center of these flows. Circle provides the infrastructure; Anchorage provides a federal charter. Neither can offer deposits, lending, or FDIC insurance. That's the structural opening — a bank offering stablecoin services becomes the natural home for its customers' agent spending as agentic volume scales. The bank that doesn't will find its customers' agents funding themselves somewhere else.

Coupon Clippings

The pace of change in our industry is accelerating, and many important developments don't always require a full analysis. To ensure you don't miss these valuable signals, we publish Coupon Clippings.

Think of our main articles as the bond itself; this section is for the interest payments—smaller, valuable tidbits of news worth 'clipping' to stay ahead.

The SEC's Tokenized Stock Exemption Could Actually Be Different This Time

The SEC is preparing an "innovation exemption" framework that would allow tokenized versions of publicly listed stocks to trade on non-traditional platforms like centralized exchanges (Coinbase) or decentralized, on-chain exchanges (UniSwap). The exemption may temporarily waive certain securities law requirements, including full broker-dealer registration, to enable market-structure experimentation under SEC Chair Paul Atkins' "Project Crypto" initiative. In recent newsletters, I characterized developments in tokenized stock trading as innovation theater: replicating the existing market structure on blockchain without changing the economics. This exemption, if it allows third-party tokenization of equities without issuer approval and permits trading on DeFi platforms outside traditional ATS or exchange infrastructure, would break the issuer-control bottleneck that has kept tokenized equities from scaling. Banks should watch the guardrails carefully when the framework publishes, specifically whether DeFi trading venues are included and whether third-party issuance is permissible, because those two elements determine whether this is genuine market structure reform or another centrally controlled experiment. The strategic implication is the same regardless: tokenized equities, combined with stablecoin payment rails, make it architecturally simpler for banks to offer brokerage services within the same account infrastructure they're already building. Banks that build stablecoin services today will have the infrastructure in place that easily extends to tokenized stock trading. [Full Story]

Credit Unions Get Their GENIUS Act Playbook — and the Same Hard Questions

The NCUA published a proposed rule establishing standards for credit unions seeking to issue payment stablecoins under the GENIUS Act, mirroring the OCC and FDIC frameworks with credit union-specific terminology. The comment period closes July 17, and NCUA Chairman Hauptman stated the goal was to ensure credit unions "face no disadvantage" relative to banks. That seems to hold, but doesn't change the deep strategic question of whether issuance is the right choice for banks or CUs. As I argued in April, the economics of being a PPSI are increasingly unattractive: capital requirements create opportunity costs, BSA/AML compliance scope will expand over time, and as-a-service issuers are already competing to return most of reserve yield to brand partners. The better model — for credit unions and banks alike — is distribution: white-labeling a third-party stablecoin, capturing the customer relationship and a yield-sharing cut, without taking on the full overhead of direct issuance. [Full Story]

Thanks for reading.

We focus only on the most relevant news for bankers, and so we only send updates when the news is material and relevant. If you don't hear from us, don't worry, we'll be back when there is something important to read!

Best,
Davis

Omnia is a provider of stablecoin infrastructure for banks that want to capture growing demand for stablecoins. If you're interested in learning more about us, please get in touch.

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