In a significant development, the US Federal Deposit Insurance Corporation has formally proposed its approach to regulating stablecoin issuers, as mandated by the Guiding and Establishing National Innovation for US Stablecoins Act. The proposed rule, which aligns with the Office of the Comptroller of the Currency's earlier proposal, will be open for public comment for 60 days.
The FDIC has outlined capital, liquidity, and custody standards for institutions issuing stablecoins, although the specifics will be finalized after the agency reviews input and writes the final language. As expected, stablecoins will not be eligible for deposit insurance, and issuers will not be allowed 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 business risk, along with 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 would be treated similarly to other deposits. While regulators work to implement the GENIUS Act, some details may be revised by the Senate's Digital Asset Market Clarity Act, which is currently being debated. The lack of Democratic appointees in key agencies has given Republican appointees significant latitude in crafting regulations.
Despite this, the GENIUS Act itself enjoyed bipartisan support in Congress.