The US Federal Deposit Insurance Corporation has formally proposed its approach to regulating stablecoin issuers, as required by the Guiding and Establishing National Innovation for US Stablecoins Act. The proposal, which aligns with the Office of the Comptroller of the Currency's proposal in February, will be open for a 60-day public comment period.
The FDIC's role is to regulate US depository institutions that issue stablecoins from their subsidiaries, and the proposal outlines capital, liquidity, and custody standards for these firms. However, the details will not be finalized until the agency reviews input and writes the final language.
As expected, stablecoins will not be eligible for deposit insurance, and issuers will not be able to represent that their tokens pay interest or yield simply for holding or using a payment stablecoin. The proposal also suggests that issuers will need to maintain capital to manage risk and have an operational backstop. The agency has addressed the applicability of pass-through insurance to deposits held as reserves backing payment stablecoins, proposing that tokenized deposits will be treated no differently than other deposits. While regulators work to implement the GENIUS Act, lawmakers are close to resolving a debate over yield-bearing stablecoin holdings, and the bill may advance to a hearing soon.