Fed Proposes Strict Rules for Payment Stablecoin Issuers
The Federal Reserve Board has issued two proposals for regulating payment stablecoin issuers under the GENIUS Act. The first proposal would require issuers to fully back their stablecoins with high-quality, liquid assets such as short-term Treasury bills and other similar assets.
The proposal also introduces standardized capital requirements to address credit and operational risks associated with payment stablecoin activities, along with risk management standards. Additionally, it clarifies the permissibility of stablecoin and related activities for Board-supervised banks.
Separately, a second proposal establishes a tailored application process for Board-supervised banks seeking approval to issue payment stablecoins. Applicants would need to submit a business plan and financial information among other documents.
The comment period for these proposals will close 60 days after publication in the Federal Register. The Federal Reserve has made available several documents related to this matter, including a board memo and federal register notices.