FDIC Blocks Stablecoin Insurance Loophole
The Federal Deposit Insurance Corp. (FDIC) is set to propose a rule that explicitly bars stablecoin holders from receiving deposit insurance through a back door, according to FDIC Chairman Travis Hill.
Hill made the announcement at an American Bankers Association summit in Washington, where he said the proposed rule aligns with the intent of the GENIUS Act, which distinguishes stablecoins from bank deposits that carry up to $250,000 in federal guarantees.
The current pass-through rules require end-customer identities to be readily ascertainable, a standard not commonly met by large stablecoin arrangements today, Hill noted.
The FDIC's preliminary view is that tokenized deposits - bank deposits represented as programmable blockchain tokens, which the GENIUS Act does not cover - should receive the same insurance treatment as conventional deposits.