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GENIUS stablecoin reserves cover short debt but not long bonds
The Treasury plans to expand liquidity-support buybacks for 10- to 30-year debt starting Sept. 9, highlighting a gap between stablecoin reserve rules and long-duration bond demand.
Stablecoin demand is increasingly relevant to the U.S. debt market, but the maturity range that stablecoin reserves are allowed to hold matters more than total growth, according to CryptoSlate.
Under the GENIUS Act, permitted payment stablecoin issuers must maintain identifiable reserves of at least one dollar for every payment stablecoin outstanding, using largely cash-like and short-duration assets with no more than 93 days remaining. The eligible reserve menu includes U.S. currency and Federal Reserve balances, withdrawable bank deposits, and Treasuries, overnight repo and reverse repo, and money-market funds invested in those instruments, with qualifying tokenized versions also included.
That short-duration design means support for longer-duration government debt is outside the reserve mandate. A newly issued 10-year note or 30-year bond falls outside the direct Treasury reserve category, and CryptoSlate notes that any link to longer-term bonds would run through broader financial conditions rather than a direct reserve trade.
Implementation is still underway. The law was enacted in July 2025, with the general effective date set as the earlier of Jan. 18, 2027 or 120 days after final implementing rules, while the Office of the Comptroller of the Currency said its final rule was expected by November. Separately, on Aug. 19 the Treasury said it would at least double the maximum size of liquidity-support buybacks in the 10- to 20-year and 20- to 30-year nominal sectors beginning Sept. 9, starting a different debt-market storyline from the stablecoin reserve framework.