In a significant step towards regulating the stablecoin industry, the US Federal Deposit Insurance Corporation has formally proposed its approach to governing stablecoin issuers. 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 earlier proposal.
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 business risk, plus an operational backstop based on previous year's operating expenses.
While regulators work to implement the GENIUS Act, some details are potentially being overhauled by the Senate's Digital Asset Market Clarity Act. The FDIC's proposal is a significant step towards providing clarity and regulatory certainty for the stablecoin industry.