The Federal Deposit Insurance Corporation (FDIC) has formally proposed its approach to regulating stablecoin issuers, as required by the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The proposal, which aligns closely with the Office of the Comptroller of the Currency's (OCC) proposal in February, outlines capital, liquidity, and custody standards for institutions issuing stablecoins from their subsidiaries.
The proposal will be open for a 60-day public comment period, during which the agency will gather feedback on its 144 questions. As expected, stablecoins will not be eligible for deposit insurance, and issuers will not be able to offer interest or yield on their tokens simply for holding or using a payment stablecoin.
The FDIC's proposal also suggests that issuers will need to maintain capital to manage business risk, as well as an operational backstop based on previous year's operating expenses. While regulators work to implement the GENIUS Act, lawmakers are also debating the Digital Asset Market Clarity Act, which could potentially overhaul some of the details of the GENIUS Act. The lack of Democratic appointees in key agencies has given Republican appointees significant leeway in crafting regulations, despite the GENIUS Act's bipartisan support in Congress.