FDIC proposes GENIUS Act rules for stablecoin issuers

The FDIC proposed new stablecoin rules under the GENIUS Act, limiting deposit insurance to corporate deposits and seeking public input before finalization.

The Federal Deposit Insurance Corporation (FDIC) has introduced a comprehensive regulatory framework for stablecoin issuers under the GENIUS Act. This marks a pivotal move toward formalizing federal oversight of digital assets pegged to traditional currencies. Under the proposed rules, the FDIC would serve as the primary regulator for institutions issuing payment stablecoins through subsidiaries, leveraging its experience in supervising depository institutions. The framework addresses reserve asset composition, redemption processes, capital requirements, and risk management protocols. Importantly, the FDIC clarified that deposit insurance will only apply to corporate deposits, not to individual stablecoin holders. Certain interest-bearing arrangements are prohibited. Tokenized deposits meeting the statutory definition of "deposit" will be treated like traditional deposits. The FDIC is seeking public feedback on 144 regulatory questions during a 60-day comment period. The rules are set to take effect on January 18, 2027, unless implemented sooner.