FDIC Enters Stablecoin Rulemaking With Reserve and Capital Requirements
The Federal Deposit Insurance Corporation formally proposed on Tuesday a framework to regulate permitted payment stablecoin issuers, joining the Office of the Comptroller of the Currency and the Treasury Department in translating the GENIUS Act into binding rules. The vote launches a 60-day public comment period on the 191-page document.
The proposal applies specifically to stablecoin issuers that operate as subsidiaries of insured depository institutions or have received authorisation from a federal or state regulator. Those issuers would need to satisfy reserve asset requirements, maintain capital adequate to cover the risks of the business, and hold a separate operational backstop calculated from the prior year's operating expenses.
The FDIC was explicit that deposit insurance will not cover stablecoin holders. FDIC staff cited the GENIUS Act's own text, which states that payment stablecoins are not backed by the full faith and credit of the United States and are not subject to federal deposit insurance. However, the proposal does address pass-through insurance for the deposits that stablecoin issuers hold as reserve backing, proposing that tokenized deposits meeting the statutory definition of "deposit" be treated identically to other deposits.
The proposal also takes a position on rewards programs. Issuers will not be permitted to represent that their tokens pay interest or yield simply for holding or using a payment stablecoin, including via arrangements with third-party platforms such as exchanges. Industry participants have argued that properly structured rewards programs can be distinguished from interest-bearing instruments, and crypto policy specialists have largely concluded such programs need not conflict with the rule.
FDIC Chair Travis Hill pointed to the accelerating convergence of traditional banking and digital assets as the driver for the agency's involvement. "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," Hill said in prepared remarks.
The FDIC's proposal is designed to align closely with the OCC's February framework. The OCC, FDIC, Treasury, and the markets regulators are all implementing GENIUS Act rules under a Republican-only appointee structure, with the White House having declined to fill Democratic vacancies across the agencies.
The rulemaking is not yet final, and finalisation is unlikely before the agency reviews public input and redrafts the rule language. Meanwhile, the GENIUS Act itself may be amended: Senate lawmakers are debating changes to the law's treatment of yield-bearing stablecoin holdings as part of broader Digital Asset Market Clarity Act discussions. Congress returns from recess later this week, and no hearing on those amendments has been scheduled.
