CFTC, FDIC Stablecoin Rules; Prediction Market Jurisdictional Rulings

April 10, 2026

MoFo's Financial Markets & Innovation - April 10, 2026

Alexandra Steinberg Barrage, Garrett Bosch, Val Dahiya, Trevor Levine, Ryne Miller Morrison & Foerster LLP + Follow Contact LinkedIn Facebook X Send Embed

Please see below for this week’s Financial Markets & Innovation Weekly Update from Morrison Foerster, tracking how emerging technologies are reshaping financial markets and how U.S. and global regulators are responding. Covering developments across digital assets, prediction markets, artificial intelligence, and next-generation trading infrastructure, this update highlights key regulatory actions, enforcement activity, policy signals, and related market structure implications.

CFTC Sues States to Establish Exclusive Jurisdiction Over CFTC-Registered Prediction Markets

On April 2, the CFTC, partnered with the Department of Justice, filed affirmative lawsuits against Arizona, Connecticut, and Illinois for their actions regulating prediction markets. The CFTC claims that it has the sole authority to regulate these exchanges under the Commodity Exchange Act because they are registered as designated contract markets. The lawsuits are filed in response to these three states bringing actions against prediction markets for state gambling law violations. The CFTC is seeking a declaration that the Commodity Exchange Act preempts states from applying gambling laws to CFTC‑registered events contracts.

FDIC Issues Proposed Rule Implementing GENIUS Requirements

On April 7, the Federal Deposit Insurance Corporation (FDIC) issued a notice of proposed rulemaking that implements GENIUS requirements applicable to FDIC-supervised permitted payment stablecoin issuers, clarifies proposed treatment of pass-through insurance coverage, and defines treatment of tokenized deposits. While the proposed rule implements GENIUS only with respect to the FDIC’s jurisdiction, the FDIC intends for its rule to align largely with the OCC-proposed rule from March 2, 2026, and requests comments on “the extent to which the primary Federal payment stablecoin regulators should further align” when proposing regulations. Comments will be due 60 days after publication in the Federal Register.

CLARITY Update: Senator Hagerty Predicts Progress and White House Issues Research on Stablecoin Yield

Speaking at an event on digital assets, Senator Hagerty (R-Tenn.) predicted that the CLARITY Act will begin to progress out of the Senate Banking Committee after the next work period starts on April 13. He stated that he doesn’t believe that the issues preventing passage were “insurmountable” and the path out of the Sen. Banking Committee could be completed in April.

Separately, on April 8, the White House Council of Economic Advisors released research entitled “Effects of Stablecoin Yield Prohibition on Bank Lending,” which found that prohibiting stablecoin yield increased bank lending by 0.02% and caused a $800 million net welfare loss to consumers. The findings are likely intended to support the absence of stablecoin yield provisions in the CLARITY Act, as the model finds that the effects of stablecoin yield on bank deposits are minimal.

Third Circuit Backs CFTC’s Exclusive Jurisdiction Over Prediction Markets

The U.S. Court of Appeals for the Third Circuit ruled that the CFTC has exclusive jurisdiction over sports‑related prediction markets in a case brought by the New Jersey Attorney General against Kalshi. Kalshi had sued New Jersey after receiving a cease-and-desist letter ordering a halt to sports-related events contracts that violated state gambling laws. Kalshi argued that the events contracts are exclusively regulated by the CFTC and that any state bringing forth gambling law violations would be preempted by CFTC authority.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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