Fed Proposes Stablecoin Issuer Rules Under GENIUS Act

The Federal Reserve has proposed two new rules under the GENIUS Act to regulate stablecoin issuers and banks. One proposal requires Fed-supervised issuers to fully back payment tokens with reserve assets, specifically short-term U.S. Treasury bills.

The other proposal outlines an approval process for insured state member banks seeking stablecoin-issuing subsidiaries.

Under the first proposal, issuers would need to meet new capital, risk-management, and safeguard standards, while the second proposal sets a 30-day timeframe for completeness reviews and a 120-day decision period for Fed approval.