Fed proposes reserve, capital and application rules for bank-affiliated stablecoin issuers
The Federal Reserve became the latest US regulator to publish GENIUS Act rules, setting out how Board-supervised firms would back, capitalize and apply to issue stablecoins.
By Tech CEO Daily Staff, Newsroom
· 3 min read
The news
The Federal Reserve Board on September 24 released two proposals implementing its share of the GENIUS Act, the 2025 federal law that created a licensing regime for payment stablecoins.
The first proposal would require stablecoin issuers supervised by the Board to fully back their coins with a limited set of permissible reserve assets, such as short-term Treasury bills. It also sets standardized capital requirements aimed at credit and operational risk, along with risk-management standards, and covers firms that safekeep the assets backing stablecoins. It also clarifies which stablecoin activities Board-supervised banks may conduct.
The second proposal lays out an application process for Board-supervised insured depository institutions that want a subsidiary to issue payment stablecoins. Applicants would submit business plans and financial information, and the draft includes procedures for determinations, hearings and appeals. Comments are open for 60 days after the proposals appear in the Federal Register.
Governor Michael Barr backed issuing the proposal for comment, but used a statement to press for clearly defined redemption rights and to question whether interest-rate and foreign-currency risks are adequately covered. Stablecoins, he said, “will only be stable if they can be reliably and promptly redeemed at par.” He also flagged concern that a “significant or systemic” standard in the anti-money-laundering area could limit the Board’s supervisory reach.
The Fed is late to the table. Payments Dive noted the law called for regulators to write rules by July 2026. The OCC and NCUA proposed rules in February, the FDIC in April and Treasury in August, and no agency has yet finalized its version, according to the trade publication.
The numbers
- Comment period
- 60 days after Federal Register publication
- Proposals released
- 2
- Agencies with final GENIUS Act rules
- 0 (per Payments Dive)
Why CEOs should care
For companies weighing stablecoins for treasury, cross-border payouts or customer checkout, the Fed’s draft fills in a missing piece: what a bank-issued dollar token would have to hold and how much capital would sit behind it. Reserves concentrated in short-term Treasuries and standardized capital rules would make bank-affiliated coins easier to compare with those from nonbank issuers overseen by other agencies.
The practical takeaway is timing. With every major US rule still in proposed form, contract terms, redemption commitments and counterparty due diligence for stablecoin vendors should be written to adapt as final rules land. Barr’s focus on redemption at par is a useful checklist item for any finance team holding these tokens.
What's next
Watch for Federal Register publication, which starts the 60-day comment clock, and for the first agency to finalize its rules, which will set the tone for the others.
Sources
- GovernmentFederal Reserve Board proposes rules to implement GENIUS Act— Federal Reserve Board
- GovernmentStatement by Governor Barr— Federal Reserve Board
- ReportFed proposes stablecoin rules— Payments Dive
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