New research shows most U.S. dollar stablecoins will not follow the GENIUS Act’s reserve asset requirements.

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A study from the Bank Policy Institute (BPI) published Friday (Nov. 6) examined data on the reserve asset holdings of the 10 largest circulating dollar stablecoins, which accounted for 97% of all stablecoins as of June of this year.

The GENIUS Act requires payment stablecoin issuers to maintain reserve asset requirements to prevent the coins from de-pegging from the dollar. The coins must be “backed by U.S. Treasury securities with less than 93-day maturity, overnight reverse repurchase agreements secured by Treasury securities and bank deposits, among other highly liquid assets,” the BPI report said.

“We find that only two of the 10 largest dollar stablecoins, representing 26 percent of tokens outstanding, currently align with GENIUS Act reserve asset requirements,” the report added. “We caution that complying with these reserve asset requirements does not mean that a stablecoin always will maintain its value.”

The majority of dollar stablecoins remaining—those offered offshore and those backed by crypto assets—are outside of the act’s framework and hold much riskier reserve asset portfolios, the BPI said.

“Although any stablecoin presents risk of de-pegging, these stablecoins will continue to have a heightened risk of de-pegging in the future,” the report said.

According to the report, four of the 10 largest stablecoins are offered onshore and are expected to be subject to GENIUS Act requirements when they go into effect next year.

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