The U.S. Federal Deposit Insurance Corporation (FDIC) is set to roll out new regulations concerning stablecoins as part of its implementation of the GENIUS Act. Acting Chairman Travis Hill announced that the agency is preparing to introduce its initial regulatory framework to the House Financial Services Committee by the end of December, marking a significant step in the federal oversight of stablecoin issuers.
Hill emphasized that the proposal will outline how the FDIC plans to assess applications and supervise issuers within the new federal framework. This initiative is part of a broader effort to create a cohesive regulatory standard in the rapidly evolving stablecoin market, where demand and innovation continue to grow.
The GENIUS Act, which was signed into law by President Trump in July, provides a federal structure specifically for payment issuers of stablecoins that cater to U.S. users. Under this legislation, only licensed issuers are permitted to operate, which includes state-qualified or federally qualified nonbank issuers, as well as subsidiaries of insured depository institutions.
Looking towards the future, Hill noted that the FDIC remains optimistic about the involvement of banks in digital asset services by 2025. However, he acknowledged the importance of robust risk management in these activities as the agency develops its approach to the stablecoin sector and its emerging regulations.
New standards concerning liquidity, capital, and reserve requirements are anticipated to be part of the forthcoming proposals. Hill indicated that the FDIC will actively monitor subsidiaries of insured banks that issue payment stablecoins. He mentioned that the GENIUS Act entails several rulemakings aimed at establishing comprehensive capital rules, liquidity standards, and reserve diversification regulations.
Additionally, Hill referenced recommendations made by the President”s Working Group on Digital Asset Markets, which provides further guidance on the specifications for tokenized assets within the banking framework. The FDIC is in the process of formulating regulations that will clarify the regulatory expectations surrounding tokenized deposits.
Other regulatory bodies, including the Federal Reserve, are expected to provide testimony during upcoming hearings in the House. Federal Reserve Vice Chair of Supervision Michelle Bowman indicated that the central bank is also developing its own set of capital, liquidity, and diversification regulations tailored for stablecoin issuers under the GENIUS Act.
Meanwhile, the Treasury Department is advancing its responsibilities under the GENIUS Act. On September 18, it issued an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public feedback on stablecoin regulation. This initiative aims to foster innovation while also addressing potential risks to financial stability.
The ANPRM is informed by contributions from various stakeholders, building on a previous request for input from August regarding the detection of illicit digital asset usage. The comment period for this initiative is open until November 4.
The coordinated efforts of federal agencies suggest a significant stride toward establishing a unified regulatory framework for stablecoins. Key proposals from regulators are expected to materialize over the coming months, furthering the implementation of the GENIUS Act.
