Fed Unveils Stablecoin Rules Amid Growing Adoption
The Federal Reserve has proposed rules for stablecoin issuers it oversees, requiring them to fully back their tokens with safe and liquid assets. The central bank opened two proposals for public comment as part of its effort to build out the regulatory framework required under the GENIUS Act, which was signed into law by President Donald Trump in July 2025.
The first proposal would require Board-supervised payment stablecoin issuers to hold reserves entirely in permissible assets such as short-term Treasury bills and other high-quality, liquid holdings. It also establishes standardized capital requirements to address credit and operational risks, sets risk-management standards, and outlines rules for firms that safekeep the assets backing the tokens.
The second proposal would create a tailored application process for Board-supervised banks seeking to issue payment stablecoins, requiring them to submit a business plan and financial information. It also establishes procedures for appeals, hearings, and final decisions.
Stablecoins are blockchain-based tokens designed to hold a steady value by pegging to a reference asset, most commonly the U.S. dollar. They've become a crucial part of crypto's plumbing, used to move money between exchanges, settle trades, send cross-border payments, and park funds without converting back to traditional currency.