Weekly brief: the first GENIUS Act final rule sets no blanket haircut on tokenised reserves (week ending 23 October 2026)

The week in one paragraph

The OCC published the first final GENIUS Act rule, setting no broad-based haircut on reserve assets in tokenised form and counting overnight reverse repo backed by Treasuries [1]. J.P. Morgan put its deposit token on Ethereum [2] and its tokenised money market funds on Solana [3]. In the UK, LSEG B3 passed Gate 2 of the Digital Securities Sandbox [4], the FCA said its joint tokenisation roadmap with the Bank of England is due next month [5] and LSEG reported cash collateral at LCH up 22.1% [7]. The ECB set out where banks fit into Pontes and Appia [8], MAS brought the central banks of Malaysia and Thailand into BLOOM [9], ISDA's chief executive called money market funds "all but impossible to use as margin" [10] and the FSB Secretary General said the FSB is gathering information on planning for stablecoin failure [12]. The thread: the rules for the cash leg and its reserves are being written now, while the collateral those reserves hold is still hard to move.

Americas

OCC finalises the first GENIUS Act rule, with no blanket haircut on tokenised reserves

On 23 October the OCC's final rule implementing the GENIUS Act for stablecoin issuers under its supervision was published in the Federal Register; it takes effect on 18 January 2027 [1]. Redemption must be completed within two business days. A reserve asset in "tokenized form", whose authoritative record is kept on a distributed ledger and which carries identical legal rights, counts as a reserve asset, and the OCC is "not including a broad-based haircut for reserve assets in tokenized form", though an issuer may need to apply its own haircut where a tokenised asset is harder to monetise. Overnight reverse repo, in which the issuer lends cash against Treasury bills, notes or bonds, counts as a reserve asset when it is triparty, centrally cleared or bilateral with a counterparty judged creditworthy even under severe stress [1].

What it changes: Tokenised Treasuries and tokenised money market funds can sit in a US stablecoin reserve without a rule-set discount, although issuers may still apply their own haircuts; reverse repo, already allowed by the Act, is now defined in detail. Issuers' reserve managers and repo desks may become a new, rules-bound source of demand for tokenised collateral.

J.P. Morgan puts its deposit token and tokenised money market funds on public chains

On 19 October Kinexys made JPM Coin (JPMD), a USD deposit token already on Base, available on Ethereum for institutional clients, "alongside the assets, collateral, and counterparties they transact with"; Kinexys reports average daily volume of $7 billion [2]. On 22 October J.P. Morgan Asset Management opened its tokenised money market funds MONY and JLTXX on Solana to qualified US investors; JLTXX is a registered government money market fund designed to support stablecoin issuers under the GENIUS Act [3].

What it changes: A bank-money cash leg and a fund built for stablecoin reserves now run on public networks, which could make on-chain delivery-versus-payment and margin calls possible without leaving bank money. Interoperability between chains and the bank's own ledger becomes the operational question.

UK

LSEG B3 passes Gate 2 of the Digital Securities Sandbox

On 23 October the Bank of England (with the FCA for ancillary activities) approved LSEG B3 to operate as a digital securities depository in Gate 2 of the Digital Securities Sandbox, covering notary, maintenance and settlement [4]. Its limits are £900 million for sterling corporate bonds, £1.8 billion for non-sterling corporate bonds and £300 million for short-term money market instruments, including commercial paper and certificates of deposit [4].

What it changes: The UK's main exchange group can now record and settle live digital bonds and commercial paper within set limits. Commercial paper inside the limits matters for collateral: short-dated digital instruments may be natural candidates for intraday liquidity.

FCA: a joint tokenisation roadmap next month, and a T+1 warning

On 20 October the FCA's Sarah Pritchard said that "next month, our joint tokenisation roadmap with the Bank of England will set the path from testing to lasting infrastructure", and warned firms about T+1, "less than a year away", that "we will act if you're not" prepared [5]. Minutes of the Bank of England's Securities Lending Committee, published on 22 October, record the industry as "broadly on track" for T+1 in October 2027 "but there are significant differences in readiness", and say "practical use cases remain the critical challenge" for tokenisation [6].

What it changes: T+1 readiness is becoming a supervisory matter, and the roadmap should say how the sandbox leads to permanent infrastructure. Securities lenders face a shorter recall window first; tokenised collateral has to show a use case within it.

LCH holds more cash collateral after its minimum cash framework

LSEG's third-quarter update, published on 22 October, says income from non-cash collateral fell 9.3% after LCH launched a minimum cash framework in July 2026, while average non-cash balances fell 1.5% to €203.5 billion; average cash collateral was €117.6 billion, up 22.1% from €96.3 billion a year earlier. LSEG also cites elevated market volatility [7].

What it changes: A CCP rule, alongside market volatility, coincided with a shift towards cash within a quarter. Assets that behave like cash but earn a return, such as tokenised money market funds, are aimed at exactly this gap, if CCPs accept them.

Europe

ECB sets out where banks fit into Pontes and Appia

In slides for the Italian Banking Association on 21 October, ECB Executive Board member Piero Cipollone noted that since Pontes launched on 21 September 2026, transactions on distributed ledgers can settle in central bank money, and that since March 2026 DLT-based assets issued in central securities depositories can be used as collateral in Eurosystem credit operations [8]. From 2027 market participants will be invited to work on the Appia blueprint, due by 2028 [8].

What it changes: Settlement in central bank money and collateral eligibility for DLT assets are both in place in the euro area; the open part is the long-term design. Banks that join the Appia work in 2027 could help shape the infrastructure their collateral runs on.

Asia-Pacific

Malaysia and Thailand join MAS's BLOOM work on settling digital money across borders

On 23 October MAS said Bank Negara Malaysia and the Bank of Thailand had joined BLOOM, its initiative on cross-border settlement in digital money, as policymaker members [9]. New industry participants include Airwallex, Mastercard, Maybank, Nium, Ripple, Visa and the World Bank Group [9].

What it changes: Three central banks may align how tokenised deposits and regulated stablecoins settle across borders, the cash leg any cross-border delivery-versus-payment needs.

Global

ISDA: money market funds are still "all but impossible" to use as margin

At ISDA's Derivatives Trading Forum in Tokyo on 23 October, chief executive Scott O'Malia said money market funds "are currently all but impossible to use as margin due to operational complexities", and cited a Nasdaq and ValueExchange estimate that "as much as $50 billion of collateral is either posted in excess or not remunerated" [10]. In separate remarks the same day he said $1.6 trillion of initial and variation margin was collected by the largest market participants at the end of last year, according to ISDA's annual margin survey [11].

What it changes: The case for tokenised money market funds as collateral rests on this friction. Read with LCH's move to cash [7], the demand is visible; O'Malia names operational complexity as the barrier; eligibility in credit support annexes and CCP rules may be another.

FSB is studying stablecoin failure planning

On 21 October FSB Secretary General John Schindler said three areas were highlighted for continued attention on global stablecoins: monitoring cross-border vulnerabilities, supporting implementation of the FSB's 2023 recommendations, and gathering information on emerging approaches to "planning for the distress or failure of global stablecoin arrangements" [12].

What it changes: CCPs and settlement banks considering stablecoins as a cash leg may be expected to plan for an issuer failing, as they already do for a settlement bank.

What to watch next week

• Follow-ups from last week: the FCA's call for input on tokenised gold closed on 23 October [13]. DTCC said in July that its tokenisation service was expected to launch in October 2026 [14]; we have not yet seen a primary confirmation that it is live.
• November: the joint FCA and Bank of England tokenisation roadmap [5].
• Further out: 12 November, EBA supervision of USDC begins [15]; 27 November, ASIC CP 392 closes [16]; 9 December, LSEG Digital Markets webinar [7]; 18 January 2027, the OCC's GENIUS Act rule takes effect [1].