In a significant step towards regulating the stablecoin industry, the US Federal Deposit Insurance Corporation (FDIC) has formally proposed its approach to governing stablecoin issuers. The proposal, which is open for a 60-day public comment period, outlines the FDIC's plan for regulating depository institutions that issue stablecoins from their subsidiaries, as required by the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The proposed rule aligns closely with the Office of the Comptroller of the Currency's (OCC) proposal in February and poses 144 questions to the public.
The FDIC's role is to regulate US depository institutions, and under the GENIUS Act, it will oversee institutions issuing stablecoins from their subsidiaries, setting capital, liquidity, and custody standards. However, stablecoins will not be eligible for deposit insurance, as per the proposal.
The FDIC has also addressed concerns around rewards programs managed by third-party stablecoin relationships and has suggested that issuers will need to maintain capital to manage business risks, as well as an operational backstop. The proposal has sparked debate, with some lawmakers working on the Senate's Digital Asset Market Clarity Act, which could potentially overhaul some of the GENIUS Act's details.
The regulatory process is expected to take several months, with the FDIC reviewing input and writing the final language.