Ripple CLO Ends Speculation over What's Next for Stablecoin Regulation

The comment letter submitted to the U.S. Treasury by the National Cryptocurrency Association (NCA) on the Section 3 rules of the $GENIUS Act (Docket TREAS-DO-2026-0496) closes the period of uncertainty surrounding stablecoin regulation.

The document, signed by NCA President and Ripple Chief Legal Officer Stuart Alderoty, states that the industry accepts the requirement for one-hundred-percent reserves but puts forward a practical framework for protecting retail holders, so that Americans do not end up "stranded holding stablecoins if regulations change."

Three requests for the Treasury

The first requirement eliminates the risk of a sudden change in issuers' legal status. Missing the July 18, 2028 deadline or the revocation of a company's license must not result in the automatic blocking of citizens' funds. Alderoty calls for a safe-harbor mechanism: a temporary window within which users can redeem, sell, or convert their coins without loss, and exchanges can provide technical support without the risk of being accused of illegal trading activity.

The second priority is the creation of legal mechanisms for the return of stolen assets. The NCA proposes to establish that reissuing a payment stablecoin to replace one that was stolen or mistakenly transferred, by court decision, is fully legal and falls under the "except as required by a lawful order" exception.

The freezing procedure itself is proposed to be synchronized with FinCEN standards, obliging issuers to promptly notify affected users.

The third set of rules draws a firm line between custodial services and software developers. Providers of non-custodial wallets and interfaces that merely display a balance and do not control access keys cannot be recognized as intermediaries or sellers.

According to the NCA's position, any direct P2P transfers, transactions between individuals' own accounts, and operations within personal wallets must remain strictly outside the agency's restrictions, guaranteeing the right to "self-custody plus peer-to-peer transfers."

The filing of this document moves the dialogue between the crypto industry and U.S. regulators onto a pragmatic track. By outlining the boundaries of a technological compromise, big business has effectively placed responsibility for the stability of the retail market on the Treasury Department, which must now decide how strict the final rules will be.