Fed Proposes Stablecoin Rules to Ensure Reserve Asset Backing

The US Federal Reserve has proposed new rules for stablecoin issuers as required by last year's GENIUS Act. The proposed rules aim to ensure that dollar-backed cryptocurrency tokens are fully backed by reserve assets, such as short-term Treasury bills.

Under the proposal, payment stablecoin issuers under Fed supervision would be required to maintain a 1:1 ratio between their issued tokens and reserve assets.

The proposed rules also introduce capital requirements for stablecoin issuers to address credit and operational risks. Additionally, guidelines are outlined for Fed-supervised banks that custody reserves on behalf of stablecoin issuers.