Fed Proposes Stablecoin Rules Under GENIUS Act

The US Federal Reserve has proposed new rules for stablecoin issuers under the GENIUS Act framework. The proposals aim to establish a regulatory framework for Board-supervised payment stablecoin issuers, with full enforcement expected in January 2027.

According to the Fed's proposal, banks seeking to issue stablecoins would need to submit a business plan and financial information. This includes ensuring that stablecoins are fully backed by approved reserve assets, such as short-term U.S. Treasury bills and other high-quality assets that can be quickly turned into cash.

The proposals also introduce standard capital requirements for stablecoin activities, requiring issuers to maintain sufficient permissible reserve assets to back outstanding stablecoins. Additionally, the Fed wants issuers to follow set risk management rules as part of the new framework.