Fed Proposes Stricter Rules for Stablecoin Issuers

The US Federal Reserve has proposed new rules for stablecoin issuers, as required by last year's GENIUS Act. The proposal would require payment stablecoin issuers under Fed supervision to fully back their tokens with reserve assets such as short-term Treasury bills.

The rules also include capital requirements on stablecoin issuers to address credit and operational risks. Additionally, the proposal outlines guidelines for Fed-supervised banks that custody reserves on behalf of stablecoin issuers.

The new rules would introduce a tailored application process for banks that want to issue their own stablecoins and establish guidelines for stablecoin-related activities that these banks can engage in.