The Federal Reserve has proposed new measures for stablecoin issuers, which include reserve-asset limits and standardized capital requirements, marking a step toward implementing federal stablecoin legislation signed into law last year by President Donald Trump.
Under the proposal announced on Thursday, payment stablecoin issuers would be required to fully back their stablecoins with short-term Treasury bills or other highly liquid assets. The central bank also proposed standardized capital requirements, risk management standards, and a specific application process for board-supervised banks wishing to issue such stablecoins.
Federal regulators have been working to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act since it was signed into law last year. The legislation establishes a federal regulatory framework requiring stablecoins to be fully backed by U.S. dollars or similarly liquid assets, alongside mandatory annual audits. Although an initial implementation deadline was set for July, agencies often require additional time for new rules, and the GENIUS Act carries an effective date of January 2027.
Federal Reserve Governor Michael Barr expressed support for the latest proposal while noting that he would like to see further action regarding bank anti-money laundering measures. Specifically, Barr addressed a standard intended to prevent the board from taking supervisory or enforcement actions related to anti-money laundering deficiencies unless the identified issue is significant or systemic.
"As is the case on the Board's July proposal, I am concerned that the 'significant or systemic' standard may have unknown effects on the Board's ability to effectively substantiate that an institution establishes and maintains compliant programs," Barr stated.
