Fed Floats Full-Reserve Standards for U.S. Stablecoin Issuers

The Federal Reserve has unveiled two proposed rulemaking packages that would set guardrails for payment stablecoin issuers under the GENIUS Act, including a full-reserve framework and a dedicated approval process for banks. Under the first proposal, Fed Board-supervised payment stablecoin issuers would be required to fully back outstanding tokens with permitted reserve assets. The central bank highlighted short-term U.S. Treasury bills and other high-quality liquid assets as examples of reserves that could qualify. The package also calls for standardized capital requirements designed to cover credit and operational risks, broader risk-management expectations, and rules governing the safeguarding and custody of stablecoin reserve assets. For banks already supervised by the Federal Reserve, the proposal would also spell out which stablecoin-related activities are permissible. The move is aimed at translating the GENIUS Act's statutory framework into operational requirements institutions can use, including clarity on reserve composition, capital, custody, and supervision before rolling out products at scale. The second proposal focuses on market entry. Fed Board-supervised banks seeking to issue payment stablecoins would need to submit an application that includes a business plan and financial information. It would also establish formal processes for decisions, hearings, and appeals. The proposals are not final. The Fed is opening a 60-day public comment period that will run until 60 days after publication in the Federal Register. Governor Michael Barr supported the direction of the proposals while underscoring the need for clear redemption rights and strong safeguards, a point expected to feature prominently in the policy debate. Redemption at par, even under stress, is central to whether a stablecoin can function as reliable digital cash. **ID:** N2501 **Site:** NewsBTC **Status:** READY **Author:** NewsBTC Editorial Team **Focus Keyword:** Stablecoin **Image Keyword:** Regulation **Category:** Regulation **Tags:** Federal Reserve, Stablecoins, GENIUS Act, Banking, Regulation