The Federal Reserve has introduced new regulatory proposals for payment stablecoin issuers under its supervision, in line with the GENIUS Act framework. The first proposal mandates that stablecoins must be fully backed by permitted reserve assets, such as short-term Treasury bills and other high-quality liquid assets.
The rules also introduce standardized capital requirements to address credit and operational risks, alongside comprehensive risk management standards. Additionally, the Fed is outlining requirements for firms that safeguard reserve assets and clarifying which stablecoin-related activities are permissible for banks.
A second proposal creates a tailored application process for banks seeking approval to issue payment stablecoins. Applicants must provide detailed business plans and financial documentation. The framework also defines procedures for appeals, hearings, and final regulatory decisions.
These measures follow previous efforts by federal banking regulators to implement the GENIUS Act. In June, agencies proposed that stablecoin issuers implement customer identification programs and comply with the Bank Secrecy Act by operating as financial institutions.
