The Federal Deposit Insurance Corporation has proposed new rules under the GENIUS Act to oversee stablecoins issued through the banking system.
Summary
- FDIC has proposed new rules under the GENIUS Act to set reserve, risk management, and custody standards for bank-supervised stablecoin issuers.
- Reserve deposits backing stablecoins may receive FDIC insurance, but token holders themselves will not be covered under federal deposit protection.
- Regulators have opened a 60-day consultation window.
According to a statement released on Tuesday, the board of directors voted to propose a rule that would set reserve, redemption, capital, risk management, and custody standards for stablecoin issuers, alongside insured depository institutions under the agency’s supervision.
Per the proposal, reserve deposits that sit inside insured banks would qualify for deposit insurance coverage, but that protection would not extend to the holders of the stablecoins themselves.
Officials said classifying token holders as insured depositors would run counter to the statute. In the agency’s view, treating them as such “seems inconsistent” with the GENIUS Act’s explicit prohibition on payment stablecoins being subject to federal deposit insurance.
However, the FDIC argues that the proposed framework would still provide a “secure environment” for stablecoin holders by offering “increased assurance that their payment stablecoins are subject to elevated regulatory and supervisory standards.”
“Over the past two years, we’ve seen tremendous progress in this area, including a rapid shift in the posture of the federal government; enactment of the GENIUS Act, which establishes a framework for the regulation of payment stablecoins; and substantial technological development by both banks and nonbanks,” FDIC Chair Travis Hill said in a statement.
“As a result, development of stablecoin and tokenized deposit products continues to advance, and use cases continue to multiply.”
The effort builds on the federal law signed in July, which formally placed stablecoin activity within a defined regulatory perimeter and gave the FDIC authority over issuers operating under its supervision. The law is scheduled to take effect on Jan. 18, 2027, unless implemented earlier.
Under the GENIUS framework stablecoins issuers are mandated to back stablecoins with U.S. dollars or similarly liquid assets. Issuers with market capitalizations above $50 billion must also undergo annual audits. The legislation also outlines how foreign-issued stablecoins should be treated in U.S. markets.
A 60-day comment period has been opened for public input. The FDIC is asking for feedback on 144 questions related to how stablecoin issuers should be regulated.
Tuesday’s release marks the second step in the FDIC’s rollout of GENIUS-linked rules, following a December plan that introduced an application pathway for banks seeking approval to issue stablecoins through subsidiaries.
The Office of the Comptroller of the Currency has already outlined its own rule set, covering a wider slice of activity that includes national bank subsidiaries and certain nonbank issuers, while the Treasury Department has moved to address how smaller issuers would be overseen at the state level.
