Fed Proposes GENIUS Act Rules for Stablecoin Issuers
The Federal Reserve has proposed new rules for stablecoins under the GENIUS Act, aiming to bring them closer to the US banking system. The act requires stablecoin issuers to be fully backed by liquid assets, such as short-term US Treasury bills, and introduces standardized capital requirements to address credit and operational risks.
The proposals also clarify which stablecoin-related activities banks supervised by the Fed can conduct. Notably, a stablecoin backed by Treasury bills or other permitted assets would not become an FDIC-insured bank deposit simply because it's issued by a bank or regulated financial institution.
Major banks are racing into stablecoins as U.S. rules take shape. Bank of America, Citi, Goldman Sachs, and 18 others have committed to creating a stablecoin company that would issue a dollar-denominated token as early as the first half of 2027. The consortium said it plans to comply with the GENIUS Act.
The Fed's proposals are not final rules, and the central bank will accept public comments for 60 days after publication in the Federal Register. The effective date for the main issuer restrictions under the GENIUS Act is set for January 18, 2027.