Fed unveils new stablecoin rules under GENIUS Act
6.6 Regulation The Fed proposed rules under the GENIUS Act requiring stablecoins to be fully backed by liquid assets, set capital standards, and follow a new application process. Public comments are open for 60 days.
The Federal Reserve has introduced two significant proposals to implement the GENIUS Act, creating a federal regulatory framework for payment stablecoins. The first proposal mandates that stablecoin issuers fully back their tokens with approved reserve assets, such as short-term U.S. Treasury bills and other high-quality, liquid assets. It also establishes standardized capital requirements, risk management protocols, and rules for firms safeguarding these reserves. The second proposal outlines a tailored application process for Board-supervised banks wishing to issue stablecoins, requiring comprehensive business plans and financial documentation. Both proposals are open for a 60-day public comment period after publication in the Federal Register. Enacted in 2025, the GENIUS Act requires stablecoins to be backed at least 1:1 by qualifying reserves and subjects issuers to annual audits. These new rules aim to strengthen oversight, stability, and integrity in the stablecoin sector before the law’s January 2027 effective date, with a strong emphasis on anti-money laundering standards.
