Fed Proposes Stablecoin Rules with Reserve Asset Requirements
The US Federal Reserve has proposed new rules for issuers of dollar-backed cryptocurrency tokens known as stablecoins. The proposal is in line with last year's GENIUS Act, which established a federal regulatory framework for these tokens.
Under the proposed rules, payment stablecoin issuers under Fed supervision would be required to fully back their tokens with reserve assets such as short-term Treasury bills. This is aimed at addressing certain credit and operational risks associated with stablecoins.
The proposal also imposes capital requirements on stablecoin issuers, outlines guidelines for Fed-supervised banks that custody reserves on behalf of stablecoin issuers, and establishes a tailored application process for banks that want to issue their own stablecoins.