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 aligns with the Office of the Comptroller of the Currency's (OCC) earlier proposal, will be open for public comment for 60 days.
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 are subject to change until the rule is finalized.
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 addresses the capital requirements for issuers and 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 being debated in the Senate, and lawmakers are close to resolving a clash between the banking and crypto industries over yield-bearing stablecoin holdings.