FDIC Proposes Stablecoin Rule Under GENIUS Act as US Framework Expands

TLDR

• The FDIC proposed a new rule for stablecoin issuers under the GENIUS Act.
• The proposal sets standards for reserve assets and risk management.
• It also clarifies deposit insurance treatment for reserve-related deposits.
• The rule addresses how tokenized deposits would be treated by the FDIC.
• Public comments on the 191-page proposal are due within 60 days.

The Federal Deposit Insurance Corporation has proposed a new rule for stablecoin issuers in the United States. The proposal would create standards for reserve assets, risk controls, and related compliance duties. It follows the stablecoin law signed last year by President Donald Trump.

On Tuesday, the FDIC voted to issue the proposed rule and open it for public comment. The rule is tied to the Guiding and Establishing National Innovation for U.S. Stablecoins Act, also known as the GENIUS Act. That law created a federal framework for payment stablecoins.

Under the GENIUS Act, stablecoins must be fully backed by U.S. dollars or similar liquid assets. The law also requires annual audits for issuers with a market capitalization above $50 billion. It also sets rules for foreign-issued stablecoins operating in the US market.

The FDIC proposal would apply to permitted payment stablecoin issuers supervised by the agency. The law defines those issuers as subsidiaries of insured depository institutions or entities approved by a federal or state regulator. The agency is now seeking public input before any final rule is adopted.

Reserve Asset Rules and Deposit Treatment are Central to the Proposal

A major part of the proposal focuses on reserve assets held for payment stablecoins. The FDIC said these issuers would need to follow reserve and risk management standards. The proposal also aims to clarify how deposits serving as reserve assets would be treated under deposit insurance rules.

During Tuesday’s meeting, FDIC counsel Chantal Hernandez said the rule seeks to “clarify deposit insurance coverage of deposits that serve as reserve assets.” That point is important because stablecoin reserves may be held in insured institutions, but the stablecoins themselves are treated differently under federal law.

The proposal also addresses tokenized deposits. The FDIC said the rule would clarify how tokenized deposits should be treated within the banking system. This part of the proposal comes as both banks and nonbanks continue testing new forms of digital dollar products.

Eugene Frenkel of the FDIC said the GENIUS law already makes one point clear. He said “payment stablecoins are not backed by the full faith and credit of the United States.” He also said they are not “subject to federal deposit insurance.” That distinction remains central to the current proposal.

FDIC Joins Broader US Push to Build Stablecoin Rules

The FDIC is not acting alone in this area. Other US regulators have also started writing rules under the GENIUS Act. The Office of the Comptroller of the Currency has already released its rule set. Last week, the Treasury Department issued a proposed rule tied to state oversight of smaller issuers.

This wider regulatory effort reflects the growth of the stablecoin sector. It also reflects rising interest from banks and crypto firms. Some crypto companies are seeking bank charters, while traditional financial firms are studying stablecoin and tokenized deposit products more closely.

FDIC Chair Travis Hill pointed to that shift in prepared remarks. He said, “Over the past two years, we’ve seen tremendous progress in this area.” He also cited the government’s changing position, the passage of the GENIUS Act, and continued technical development by banks and nonbanks.

Hill said development of stablecoin and tokenized deposit products is continuing to advance. He also said use cases continue to multiply. His remarks framed the rule as part of a broader response to changes in both finance and technology.

Public Comment Period Opens as Industry Reviews 191-page Proposal

The FDIC’s proposed rule runs 191 pages and now enters the public comment stage. Comments are due within 60 days after publication in the Federal Register. The agency said comments can be submitted through its website, by email, by mail, or by hand delivery.

The agency also said comments may be made public, including personal information submitted by commenters. It noted that some material may be redacted or withheld from posting if considered inappropriate. Still, comments on the substance of the rule will be kept in the public file.

For stablecoin issuers and banks, the comment period now becomes the next step in the process. Industry participants will likely review how the proposal handles reserves, compliance, and deposit treatment. Those areas are likely to remain central as US stablecoin regulation moves forward.

The FDIC proposal adds another layer to the federal stablecoin framework now taking shape. With the OCC, Treasury, and FDIC all moving ahead, the GENIUS Act is now being translated into detailed rules for issuers, banks, and digital dollar products.