Fed Proposes Stablecoin Capital Requirements Tied to Growth

The Federal Reserve has proposed new regulations for stablecoin issuers in the US. Under the proposal, companies that issue payment stablecoins would need to hold a minimum of $20 million in capital before considering other adjustments. This requirement is directly tied to the growth of the stablecoin, with higher rates applicable as the issued amount increases.

According to the Fed's memorandum, for the first $20 billion in issued stablecoins, the marginal rate would be 2%, dropping to 1.5% for the next $30 billion and 1% on amounts above $50 billion. Additionally, a separate proposal requires issuers to hold eligible reserve assets with fair value at least equal to the face value of the coins in circulation.

The proposal separates capital and reserves, allowing issuers to meet operational risk requirements while still maintaining adequate reserves. The scope of the rule includes approved subsidiaries of insured state member banks and certain qualified state issuers that move under Fed supervision.