The Federal Deposit Insurance Corporation (FDIC) has formally proposed its approach to regulating stablecoin issuers, as required by 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) proposal in February, 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 sets out 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.
The proposal also clarifies that 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 a payment stablecoin. The FDIC's proposal suggests that issuers will need to maintain capital to manage the risk of their business, as well as an operational backstop based on previous year's operating expenses.
The agency also addressed the applicability of pass-through insurance to deposits held as reserves backing payment stablecoins, proposing that tokenized deposits would be treated no differently than other deposits. While regulators work to implement the GENIUS Act, some of its details are potentially being overhauled by the Senate's Digital Asset Market Clarity Act. The OCC, FDIC, and other agencies involved in implementing the rule have few impediments in crafting regulations, but the GENIUS Act itself had drawn significant bipartisan support in both chambers of Congress when it was passed into law.