Fed Proposes Stablecoin Rules Under GENIUS Act

The Federal Reserve has proposed two rules to implement the GENIUS Act for payment stablecoin issuers, seeking public comment on a framework that would require issuers to fully back their tokens with permissible reserve assets and set new capital and risk-management standards.

The proposals, released on September 24, mark the central bank's latest step to put its portion of the U.S. stablecoin law into effect and give banks a clearer path into the business of issuing dollar-pegged tokens.

The first proposal would require Board-supervised payment stablecoin issuers to hold reserve assets whose value fully covers their outstanding coins at all times, including short-term Treasury bills and certain other high-quality, liquid assets.