Fed Proposes Reserve and Capital Rules for Stablecoin Issuers Under GENIUS Act

The Federal Reserve has taken its first concrete steps in implementing the GENIUS Act's stablecoin framework by proposing two regulatory frameworks for payment stablecoin issuers it supervises. The rules aim to ensure that every issued stablecoin is backed by safe, readily convertible reserves. According to the proposal, stablecoin issuers must back their tokens with high-quality liquid assets, including short-term Treasury bills, and meet standardized capital requirements.

The proposals also establish a tailored application framework for entities seeking to become Board-supervised payment stablecoin issuers. This framework requires applicants to submit business plans and detailed financial information. The Federal Reserve will conduct a 60-day public comment period after the publication in the Federal Register.