The FDIC moved closer on Tuesday to setting federal rules for stablecoin issuers, unveiling a detailed proposal under last year’s GENIUS Act that largely mirrors the Office of the Comptroller of the Currency’s (OCC) approach.
What the FDIC proposed
- The agency released a lengthy notice — including 144 questions — and opened a 60-day public comment period. The input will feed into drafting a final rule, a process that is likely to take months.
- As the regulator of U.S. depository institutions, the FDIC’s remit under GENIUS is to regulate banks that issue stablecoins through subsidiaries. Its draft sets out capital, liquidity and custody standards for those issuers and would require an “operational backstop” in addition to capital, sized against the prior year’s operating expenses.
- Consistent with expectations, the FDIC clarified that stablecoins would not receive the deposit insurance that protects traditional bank accounts. At the same time, it said tokenized deposits that meet the statutory definition of “deposit” would be treated the same as other deposits for pass-through insurance purposes.
Tight language on yield and rewards
- Echoing the OCC’s February proposal, the FDIC warned issuers they cannot represent that a payment stablecoin pays interest or yield “simply for holding or using” it — including via third-party arrangements such as exchange-managed programs. That provision initially alarmed some crypto-policy experts, but many in the industry believe properly structured rewards programs can be crafted to comply with the rules.
Where this fits in the rulemaking timeline
- This is the FDIC’s second GENIUS Act proposal, following a December notice about issuer application processes. The agency said the specifics won’t be finalized until it reviews public comments and completes further drafting.
- Other federal agencies involved in implementing GENIUS include the OCC, the Treasury Department and market regulators; the White House’s current staffing choices mean Republican appointees dominate these agencies, reducing internal dissent on regulatory text.
Potential changes from Congress
- The rules being written by regulators could still shift because of pending legislation. Lawmakers have been hashing out the Senate’s Digital Asset Market Clarity Act, which could alter aspects of how yield-bearing stablecoin arrangements are treated. That showdown — sparked by industry disagreement over yield-bearing stablecoin holdings — has been a months-long debate lawmakers say they’re close to resolving. Congress reconvenes later this week.
Bottom line
The FDIC’s proposal narrows in on the core supervision and safety mechanisms it believes are necessary for bank-backed stablecoins: capital cushions, liquidity and custody controls, and limits on how issuers market returns. But with public comment, parallel agency rulemaking and potential legislative tweaks still ahead, the final regulatory landscape for U.S. stablecoins remains a work in progress.
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