FDIC Unveils Proposed Stablecoin Framework Under the GENIUS Act

The U.S. Federal Deposit Insurance Corp. on Tuesday released a formal proposal laying out how it would oversee stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, joining other federal regulators tasked with writing and enforcing the law's rules. The FDIC said its approach is designed to closely align with the Office of the Comptroller of the Currency's plan issued in February. The proposal now moves into a 60-day public comment period, focused on an extensive set of 144 questions. Under the GENIUS Act, the FDIC would regulate U.S. depository institutions that issue stablecoins through subsidiaries. The agency proposed standards covering capital, liquidity and custody, with final requirements to be set once the rulemaking process concludes after months of review and drafting. Tuesday's release marks the FDIC's second GENIUS-related proposal, following its December outline of the issuer application process. The proposal reiterates that stablecoins would not receive FDIC deposit insurance, unlike traditional bank deposits. Echoing concerns raised after the OCC's earlier proposal, the FDIC said issuers could not claim their tokens pay interest or yield "simply for holding or using a payment stablecoin," including through third-party arrangements, according to a staff presentation. Industry participants have increasingly signaled that rewards programs structured to fit within the rules should remain feasible. The FDIC also proposed a capital framework intended to address business risks, plus "an operational backstop, separate from the capital requirement," tied to the prior year's operating expenses. It addressed the question of pass-through insurance for deposits held as reserves backing payment stablecoins, proposing that tokenized deposits meeting the statutory definition of 'deposit' would be treated the same as other deposits. As regulators implement GENIUS, some provisions may be revisited through work on the Senate's Digital Asset Market Clarity Act. Lawmakers have been working to resolve a months-long dispute between banking and crypto interests over yield-bearing stablecoin holdings, though the bill has not yet moved to a required hearing. Congress returns from recess later this week. The OCC, FDIC and other agencies involved in implementing the framework—including the Treasury Department and market regulators—face few internal obstacles to shaping the rules as Republican appointees prefer. President Donald Trump's White House has declined to name Democratic appointees to multiple agency vacancies, leaving no Democrats in place to object to regulatory language. GENIUS itself passed with significant bipartisan support in both chambers. Read more: U.S. FDIC proposes first U.S. stablecoin rule to emerge from GENIUS Act