Fed Proposes Stricter Rules for Payment Stablecoin Issuers

The US Federal Reserve has proposed rules requiring payment stablecoin issuers under its supervision to fully back outstanding tokens with specific reserve assets.

According to the Federal Reserve, the proposal is part of the work to translate the GENIUS Act into operational rules, including provisions on stablecoin yield programs.

The first proposal requires payment stablecoins to be fully backed by permissible reserve assets, such as short-term US Treasury bills and other high-quality, liquid assets. The draft also sets standardized capital requirements to anticipate credit and operational risks.

Federal Reserve Governor Michael S. Barr said that the stablecoin framework needs to ensure tokens can be redeemed at par value under various conditions, including when markets are under stress.