The US Federal Deposit Insurance Corporation has formally unveiled its proposed approach to regulating stablecoin issuers, as required by the Guiding and Establishing National Innovation for US Stablecoins Act. The proposal, which aligns with the Office of the Comptroller of the Currency's earlier suggestion, 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 will not be finalized until the agency reviews the input and writes the final language. 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 a payment stablecoin. The proposal also suggests that issuers will need to maintain capital to manage business risks, 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 be treated the same as other deposits. While regulators work to implement the GENIUS Act, some details may be overhauled by the Senate's Digital Asset Market Clarity Act. The clash between the banking and crypto industries over yield-bearing stablecoin holdings has turned into a months-long debate, with lawmakers aiming to resolve the issue.
The regulatory agencies, including the Treasury Department and markets regulators, have the flexibility to craft regulations without significant opposition. The GENIUS Act itself had garnered bipartisan support in Congress when it was passed into law.