FDIC proposes GENIUS Act rules for bank-supervised stablecoins

On Tuesday, the Federal Deposit Insurance Corporation advanced a proposed rule under the GENIUS Act to oversee stablecoins issued through the banking system. The plan would set standards for reserves, redemption, capital, risk management and custody for issuers under FDIC supervision and for insured depository institutions. The agency opened a 60-day public comment period.

The FDIC clarified that deposits held as stablecoin reserves at insured banks would qualify for deposit insurance, while individual token holders would not be covered. The agency indicated that treating token holders as insured depositors conflicts with the statute, which bars applying federal deposit insurance to payment stablecoins.

Enacted in July, the GENIUS Act established a federal framework for payment stablecoins and authorized the FDIC to regulate issuers it supervises. The law takes effect on January 18, 2027, unless implemented earlier. It requires stablecoins to be backed by U.S. dollars or similarly liquid assets, calls for annual audits for issuers with market capitalizations above $50 billion, and addresses the treatment of foreign-issued stablecoins in U.S. markets.

The agency is seeking feedback on 144 questions to help finalize the rule. The proposal follows a December plan that created an application pathway for banks to issue stablecoins through subsidiaries. Related work is underway at the Office of the Comptroller of the Currency, which has outlined rules for national bank subsidiaries and certain nonbank issuers, and at the Treasury Department, which is developing oversight for smaller issuers at the state level.

In a statement, FDIC Chair Travis Hill pointed to recent progress and expanding use cases: “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. As a result, development of stablecoin and tokenized deposit products continues to advance, and use cases continue to multiply.”