The Federal Deposit Insurance Corporation (FDIC) has formally proposed its approach to regulating stablecoin issuers, marking a significant step towards implementing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The proposed rule, which will be open for public comment for 60 days, aims to align with the Office of the Comptroller of the Currency's (OCC) proposal in February.
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 offer interest or yield on their tokens simply for holding or using them. The proposal also suggests that issuers will need to maintain capital to manage business risks and have an operational backstop. The FDIC's proposal is part of a broader effort by regulators to implement the GENIUS Act, which has drawn bipartisan support in Congress. Meanwhile, lawmakers are working to resolve a debate over yield-bearing stablecoin holdings, which could potentially impact the implementation of the GENIUS Act.