FDIC Unveils New Rules for Bank-Issued Stablecoins

The FDIC has proposed a regulatory framework for banks to issue payment stablecoins via subsidiaries, requiring full backing, audits, and clear application processes, aiming to safely integrate stablecoins into the financial system.

The Federal Deposit Insurance Corporation (FDIC) has advanced a regulatory framework for bank-issued payment stablecoins under the GENIUS Act. The proposal requires banks to apply for authorization before issuing stablecoins through dedicated subsidiaries, detailing financial, structural, and operational information. The FDIC will evaluate applications based on financial soundness, management, and compliance, with clear timelines for review and an appeals process for denials. The GENIUS Act mandates that stablecoins be fully backed by U.S. dollars or equivalent liquid assets, with annual audits for large issuers and additional requirements for capital, liquidity, and risk management. The FDIC has opened a public comment period to gather industry feedback and aims to integrate stablecoins into the traditional financial system safely, fostering innovation while minimizing risks. The proposal includes a temporary safe harbor for early applicants and sets out specific rules for both state and non-member banks, ensuring regulatory clarity and consumer protection.