The Federal Reserve proposed new rules Thursday for stablecoin issuers under its supervision, requiring them to fully back their tokens with safe, liquid assets and maintain capital against operational risks.
The proposals form part of the regulatory framework mandated by the GENIUS Act, the stablecoin law signed in July 2025. The public comment period closes 60 days after publication in the Federal Register.
Reserve and Capital Requirements
The first proposal requires Board-supervised payment stablecoin issuers to hold reserves entirely in permissible assets such as short-term Treasury bills and other high-quality, liquid holdings. The rules would also establish standardized capital requirements to address credit and operational risks, set risk-management standards, and create guidelines for firms safekeeping the assets backing tokens.
Application Process for Banks
The second proposal creates a tailored application process for Board-supervised banks seeking to issue payment stablecoins. Banks would be required to submit business plans and financial information, with procedures established for appeals, hearings, and final decisions.
Broader Regulatory Effort
The Federal Reserve's action complements a multi-agency rollout of GENIUS Act implementation. The Office of the Comptroller of the Currency has been working to finalize its own stablecoin rules by November ahead of a January statutory deadline, while the Treasury Department has proposed rules to bar platforms from selling noncompliant stablecoins to U.S. customers.
Stablecoin Function
Stablecoins are blockchain-based tokens designed to maintain steady value by pegging to a reference asset, most commonly the U.S. dollar. Issuers back them with reserves so each token can be redeemed at face value. They are used to move money between exchanges, settle trades, send cross-border payments, and store funds without converting back to traditional currency.
