The Federal Deposit Insurance Corporation (FDIC) has formally proposed its approach to regulating stablecoin issuers, marking a significant step towards establishing federal rules for the industry. The proposal, which is open for public comment for 60 days, outlines the FDIC's plan for governing stablecoin issuers and addresses key issues such as capital, liquidity, and custody standards. The proposal is designed to align with the Office of the Comptroller of the Currency's (OCC) proposal in February and is part of the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
The FDIC's role is to regulate depository institutions that issue stablecoins from their subsidiaries, and the proposal sets out to establish clear guidelines for these institutions. The proposal also clarifies that stablecoins will not be eligible for deposit insurance, and that issuers will not be able to offer interest or yields on their tokens simply for holding or using them. Additionally, the FDIC has proposed that issuers will need to maintain sufficient capital to manage the risks associated with their business, as well as an operational backstop to ensure the stability of their operations. The proposal also addresses the applicability of pass-through insurance to deposits held as reserves backing payment stablecoins.
While the regulators work to implement the GENIUS Act, some of its details are potentially being overhauled by the work on the Senate's Digital Asset Market Clarity Act. The proposal is a significant step towards establishing clear regulations for the stablecoin industry, and its implementation is expected to have a major impact on the development of the industry in the US.