The Federal Deposit Insurance Corporation (FDIC) has formally introduced its proposed approach to regulating stablecoin issuers, a key step towards implementing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The proposal, which aligns with the Office of the Comptroller of the Currency's (OCC) February proposal, will be open for a 60-day public comment period.
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. 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, and addresses the applicability of pass-through insurance to deposits held as reserves backing payment stablecoins. While regulators work to implement the GENIUS Act, some details are potentially being overhauled by the Senate's Digital Asset Market Clarity Act, which aims to resolve the clash between the banking and crypto industries over yield-bearing stablecoin holdings.