Travis Hill, the Acting Chairman of the U.S. Federal Deposit Insurance Corporation (FDIC), is poised to deliver significant news regarding stablecoin regulations. In his upcoming testimony before the House Financial Services Committee, Hill will outline the FDIC”s plans to propose a regulatory framework for stablecoin issuers by the end of December.
The proposal is part of the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. According to Hill”s prepared remarks, the FDIC has initiated efforts to develop rules that will govern the application process for entities seeking federal oversight as stablecoin issuers. He stated, “We expect to issue a proposed rule to establish our application framework later this month.” This move signifies a proactive step by the FDIC in overseeing the evolving stablecoin market.
In addition to establishing the application process, the FDIC”s responsibilities will include setting capital requirements for banks that wish to issue stablecoins. The agency will also be tasked with creating liquidity standards and ensuring the quality of reserves that these issuers maintain. This comprehensive approach reflects the agency”s commitment to regulatory clarity in the rapidly changing landscape of digital assets.
Following the public proposal, the FDIC will welcome comments from the public for a designated period, typically extending over several months. After reviewing these comments, the agency will finalize the regulations, which will be implemented gradually. The collaborative nature of the GENIUS Act will see various federal and state entities involved in overseeing the stablecoin sector.
Hill”s testimony will also address other regulatory initiatives, including guidance on the regulatory status of tokenized deposits. This is in line with recommendations from the President”s Working Group on Digital Asset Markets, which highlighted the need for clarity in this area earlier this year.
The House hearing will include insights from other regulatory officials, including the Federal Reserve. Notably, Federal Reserve Vice Chair for Supervision Michelle Bowman emphasized that the central bank is developing necessary capital, liquidity, and diversification regulations for stablecoin issuers, as mandated by the GENIUS Act.
As regulatory scrutiny intensifies, the stablecoin market is set for a transformative period, with agencies like the FDIC and the Federal Reserve leading the charge in establishing a framework that balances innovation and consumer protection.
