FDIC Unveils Proposed Stablecoin Rulebook for Bank-Linked Issuers

The U.S. Federal Deposit Insurance Corporation (FDIC) in April 2026 released a proposed rule that would spell out how banks and their fintech subsidiaries can issue payment stablecoins under the 2025 GENIUS Act. Published in the Federal Register, the proposal is open for public comment for nearly two months, with the period ending June 9. The FDIC, an independent federal agency created by Congress, insures bank deposits, supervises the safety and soundness of certain financial institutions, and manages bank resolutions. Because it already sets standards on capital, liquidity, consumer protection, and deposit insurance matters for state-chartered banks and savings institutions outside the Federal Reserve System, the agency argues it is positioned to address the risks stablecoin issuance could pose to redemption, custody, disclosures, capital, liquidity, and sales practices. The proposal targets stablecoin issuers inside the FDIC-supervised banking system, focusing on subsidiaries established by FDIC-regulated deposit institutions that would qualify as "Payment Stablecoin Issuers" (PPSIs). It also covers certain custody and safeguarding activities. The agency’s authority is tied directly to the GENIUS Act, signed into law by Trump on July 18, 2025, which requires the FDIC, OCC, Federal Reserve, NCUA, and the Treasury to write implementing rules for payment stablecoin issuers within their jurisdictions. The GENIUS Act created the first comprehensive U.S. federal stablecoin framework, limiting legal issuance to licensed payment stablecoin issuers. Under that structure, bank subsidiaries fall under their primary bank regulator, while federally licensed nonbank issuers are primarily overseen by the OCC. The FDIC issued initial guidance in December 2025 on how bank subsidiaries could seek approval to issue stablecoins; the April 2026 draft moves from process to substance, detailing what approved issuers must maintain around reserves, redemptions, capital and liquidity, risk controls, custody, and disclosures. The message to banks is to avoid blurring the line between deposit insurance and tokenized liabilities. Six core provisions outline the proposed operating rules: 1) 1:1 reserve backing and traceability. Issuers would be required to back all outstanding stablecoins with identifiable reserves at a minimum 1:1 ratio at all times, with reserve values never falling below the total face value of coins in circulation. Records must link specific reserve assets to specific stablecoin brands. If one subsidiary issues multiple branded stablecoins, the FDIC proposes that each brand should generally have a segregated, traceable reserve pool to limit contagion risk. 2) Reserve quality, liquidity, and limits on reuse. Beyond the 1:1 test, reserves must be highly liquid so they can be converted promptly during redemption stress. The FDIC signals restrictions on practices such as re-pledging or reusing reserve assets. For repurchase arrangements involving short-term U.S. Treasuries, the draft sketches a conditional permission framework. For reverse repos, the agency is still seeking input on how to define excess collateralization and whether additional constraints are needed. 3) "T+2" timely redemption standard. Issuers would have to publish redemption policies, including timelines, procedures, and minimum redemption amounts. The FDIC proposes defining "timely redemption" as no later than two business days after a request is submitted. Any discretionary limits on timely redemption would require FDIC approval. The minimum redemption threshold could not exceed one stablecoin, a requirement aimed at ensuring retail access. 4) Permitted activities and key prohibitions. The FDIC would confine "core" PSSI activities to issuance, redemption, reserve management, and limited custody services. Other activities would be allowed only if they directly support those core functions, with "direct support" subject to supervisory interpretation. The draft also sets out bright-line restrictions: issuers cannot imply their stablecoin is backed by the full faith and credit of the U.S. government; cannot imply FDIC insurance coverage; cannot pay interest or returns to users solely for holding or using the stablecoin; and cannot lend to customers to buy the issuer’s own stablecoin, which the FDIC views as introducing leverage into a 1:1 model. 5) Capital, liquidity, and risk management tailored to the business. Rather than applying a single bank-style ratio, the FDIC proposes a flexible approach. PPSIs would use CET1 and AT1 instruments as the foundation for regulatory capital and would be expected to maintain internal processes for self-assessing and meeting capital needs. The FDIC could impose higher requirements or contingency measures for more complex or higher-risk models. Narrow issuance-and-redemption-only operations could face lower capital expectations than issuers that expand into additional activities. 6) Disclosure and reporting, with third-party attestation and executive accountability. Issuers would need to post monthly reserve compositions on their websites and make redemption terms and fees public. They would also submit confidential weekly reports to the FDIC. Monthly reserve disclosures would require review by a registered public accounting firm, which must provide a written attestation. The CEO and CFO would also be required to certify the accuracy of the monthly report to the FDIC. The proposal also addresses deposit insurance boundaries. The FDIC states that deposits held at banks as stablecoin reserves should not be marketed to stablecoin holders as eligible for "pass-through" deposit insurance. It also clarifies that if a "tokenized deposit" meets the legal definition of a "deposit," it will not be treated differently under the Federal Deposit Insurance Act simply because it is tokenized or recorded on-chain. In practice, that draws a line between stablecoins, which are not deposit insurance products, and certain tokenized deposit structures that may still qualify as deposits. The FDIC emphasizes the draft is only a proposed rule and would not apply across the entire stablecoin market—it is limited to banks and subsidiaries within the FDIC’s supervisory perimeter and related custody activities. In its economic analysis, the agency estimates that in the early years roughly 5 to 30 FDIC-supervised institutions may apply for and receive approval to issue stablecoins through subsidiaries, with a similar number, on the order of dozens, potentially providing custody services. Even with a narrow initial scope, the regulatory impact could be broad. The proposal operationalizes the GENIUS Act by converting statutory concepts into enforceable standards. Alongside the OCC’s parallel proposed rule released in February and the Treasury’s April proposal on AML and sanctions compliance, it contributes to a more complete federal framework for stablecoins. Market structure could shift toward institutions with stronger compliance programs, deeper capital, and established banking infrastructure, challenging crypto-native models reliant on light balance sheets, marketing, and yield subsidies. The draft’s bans on interest-like payments, its constraints on reserve reuse, and tight limits on references to FDIC insurance could further strengthen the relative position of bank-affiliated issuers. Viewed this way, the proposal is less a blanket boost for crypto and more a milestone in the U.S. effort to translate stablecoin policy into concrete supervisory language. While it sits below the GENIUS Act in legislative hierarchy, it may matter more day to day, setting the compliance expectations that will shape who can compete in a regulated U.S. stablecoin market.