Fed Unveils Proposed Stablecoin Rules Under the GENIUS Act

The Federal Reserve Board on Sept. 24 released two proposed rules to carry out its responsibilities under the GENIUS Act for payment stablecoin issuers, opening a public comment process on requirements that would mandate full reserve backing and impose new capital and risk-management standards. Issued at 2:30 p.m. Eastern, the proposals represent the Fed's latest step toward implementing the U.S. stablecoin law and are aimed at giving banks a clearer route into issuing dollar-pegged tokens. They also offer the market its first detailed view of how the central bank plans to oversee a segment that has become foundational to digital-asset infrastructure. Full reserve backing and capital standards Under the first proposal, Board-supervised payment stablecoin issuers would be required to maintain reserve assets with a value that fully covers outstanding coins at all times. Eligible reserves would include short-term Treasury bills and select other high-quality liquid assets. The framework would also apply standardized capital requirements to address credit and operational risks tied to payment stablecoin activities, along with risk-management standards contemplated by the statute. In addition, it would set rules for Board-supervised firms that safeguard the assets backing payment stablecoins and clarify which stablecoin-related activities are permissible for Board-supervised banks. A tailored application process for banks The second proposal establishes an application pathway for Board-supervised banks that want to issue payment stablecoins. Applicants would need to submit a business plan and financial information, among other materials. The draft also lays out procedures for appeals, hearings and final determinations. The Fed's rulemaking arrives as U.S. policymakers move to fold crypto into formal regulation, alongside other legislative efforts such as the CLARITY Act, a bill that could reshape oversight of crypto market structure. Next steps The comment period will run until 60 days after the proposals are published in the Federal Register. The GENIUS Act—the Guiding and Establishing National Innovation for U.S. Stablecoins Act—creates the federal framework for payment stablecoin issuance, and the Fed's proposals would govern issuers and reserve custodians subject to its supervision. The proposals also come as other jurisdictions tighten stablecoin scrutiny, including efforts by central banks in Europe to constrain stablecoin activity.