FDIC Proposes First Stablecoin Rule Under GENIUS Act
- FDIC proposes first stablecoin rule under GENIUS Act and opens a 60-day comment period.
- Proposal details how FDIC-regulated banks can issue stablecoins through subsidiaries.
- FDIC plans further rules on capital, liquidity, and risk management for stablecoin issuers.
The U.S. Federal Deposit Insurance Corporation has proposed the first stablecoin rule under the new GENIUS Act framework. The proposal outlines how banks can issue stablecoins through regulated subsidiaries.
The FDIC board approved the proposal on Tuesday and opened a 60-day public comment period. This step marks the first formal regulatory action following the passage of the GENIUS Act. The proposal sets rules for how FDIC-supervised banks can apply to issue payment stablecoins. It focuses on process, oversight, and safety reviews.
Acting FDIC Chair Travis Hill said the rule creates a clear and limited application pathway. He also said it aims to reduce unnecessary regulatory burden.
The GENIUS Act became law earlier this summer after congressional approval. It created a federal framework for stablecoin issuers across the United States. Under the law, different regulators oversee different types of issuers. For insured depository institutions, the FDIC serves as the primary regulator.
FDIC Outlines Application and Review Process
Under the proposal, banks must submit formal applications before issuing stablecoins through subsidiaries. Each application must describe the business model and planned activities. Applicants must also provide detailed financial information. This includes balance sheets, funding sources, and projected operational risks.
The proposal requires disclosure of subsidiary ownership and control structures. It also mandates engagement letters with registered public accounting firms. FDIC counsel Nicholas Simons said the process allows proper safety reviews. He said the agency wants to ensure sound operations without overregulation.
Once submitted, the FDIC will review applications within a 120-day window. Institutions that face rejection can use an appeals process. Hill said the framework helps regulators assess risks early. He added that stablecoin issuance requires careful oversight due to its payment role.
The proposal does not yet define capital or liquidity requirements. Instead, it focuses on application mechanics and evaluation standards. Hill told lawmakers that more detailed rules will follow. Those rules will address capital buffers, liquidity thresholds, and risk management systems.
GENIUS Act Sets Broader Stablecoin Rules
The GENIUS Act sets baseline requirements for all stablecoin issuers. It requires full backing with U.S. dollars or highly liquid assets. The law also mandates annual audits for large issuers. This applies to stablecoins with market capitalizations exceeding $50 billion.
Foreign issuers must meet additional compliance standards. These include transparency and cooperation with U.S. regulators. The FDIC proposal aligns with those statutory requirements. It translates congressional mandates into supervisory procedures.
Related: Bank of Canada Sets Strict Rules for Stablecoins Ahead of 2026 Law
Hill said the agency will review public comments before finalizing the rule. He expects that process to conclude after the comment window closes.
The proposal received unanimous approval from the FDIC’s three-member board. That vote reflected internal agreement on the framework’s direction. The agency plans to issue another proposal in the coming months. That rule will define financial safeguards for approved stablecoin subsidiaries.
Lawmakers expect agencies to move quickly under the GENIUS Act timeline. The law set deadlines for implementing key sections. The FDIC said the proposal marks an initial step. It aims to give banks clarity while preserving financial stability.
