Fed Proposes New Rules for Stablecoin Issuers Under GENIUS Act
The US Federal Reserve has proposed new rules for issuers of dollar-backed cryptocurrency tokens known as stablecoins. This move is in compliance with last year's GENIUS Act, which established a federal regulatory framework for these tokens.
Under the proposal, payment stablecoin issuers under Fed supervision would be required to fully back their tokens with certain reserve assets, such as short-term Treasury bills. Additionally, capital requirements would be imposed on stablecoin issuers to address credit and operational risks.
The new rules would also introduce guidelines for Fed-supervised banks that custody reserves on behalf of stablecoin issuers. Furthermore, the proposal outlines stablecoin-related activities that these banks can engage in, and establishes a tailored application process for banks seeking to issue their own stablecoins.