Current Affairs Security

Ripple and Friends Make Their Pitch to the Treasury on Stablecoin Rules

2026-10-20

The U.S. Turning broad principles into operational rules. The deadline for comment was the same day. You could not write this timing accidentally.

The core message is straightforward: one-to-one reserve backing is necessary but not enough. Alderoty's worry is visceral—what happens when regulations shift and ordinary Americans holding stablecoins suddenly can't touch their money? The NCA proposes a safety valve. Exchanges would get protection from enforcement during this period. Not punishment for helping customers get out. Prevention of market paralysis.

The second proposal handles the messy bits: stolen coins, mistaken transfers. When a court orders recovery, the NCA wants issuers to reissue replacement coins without triggering the law's ban on unauthorized issuance. Court order equals lawful order. Issuers notify users, freezing procedures sync with FinCEN standards. Clean, legible, avoids the pile-up of frozen funds and stranded holders that destroys trust.

The third—and probably sharpest—proposal draws a line between custodians and software. Wallet apps that show your balance but don't touch your private keys shouldn't be classified as stablecoin sellers. Neither should peer-to-peer transfers between individuals, or transfers between your own accounts. Preserve self-custody. Preserve the ability to send to a friend. This bit matters because regulation that kills non-custodial wallets would kill what makes crypto different from a bank app.

Ripple wasn't alone. The Blockchain Association threw in its own 26-page comment letter the same day, broadly backing the Treasury's approach to regulated issuers with adequate reserves but pressing for clarity. They wanted sharper definitions between custodians and developers, cleaner boundaries for traders and validators and decentralized protocols. Simpler due diligence for foreign stablecoins. Same deadline. Same dance of trying to influence rules before they're written in stone.

This is what regulation looks like when crypto matters. The Treasury's Section 3 rule covers non-bank issuers and distribution. Multiple agencies, overlapping jurisdictions, trying not to create gaps or contradictions. It's bureaucratic but necessary.

The Treasury has to synthesize dozens of comments and competing priorities and turn them into actual rules. That means months, not years, to finalize reserve standards, licensing pathways, customer protections, enforcement. Real deadline pressure.

Alderoty's dual role—Ripple executive and industry association president—signals that how stablecoin regulation lands will depend partly on conversations already happening. By pitching practical safeguards rather than resisting regulation entirely, the NCA positioned itself as constructive. Whether Treasury actually adopts these proposals will tell you something important: how much weight regulators give to industry input versus their own instincts around stability, consumer protection, and preventing financial crime.

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