Fed Stablecoin Rules Ease Reserve Requirements But Tighten Capital
The Federal Reserve has released its proposed rules for stablecoin issuers under the GENIUS Act. The Fed's approach is notable for being more lenient on reserve requirements but stricter on capital levels compared to other federal regulators.
Under the current rules, a large number of stablecoin issuers will not be subject to the Federal Reserve's oversight. This includes most major issuers that hold state or national trust charters and are regulated by the Office of the Comptroller of the Currency (OCC).
The Fed proposes that stablecoins held by subsidiaries of state-chartered banks within the Federal Reserve System, as well as uninsured depository institutions in states like Wyoming, should have their reserve requirements diversified to stay fully backed under stress. The preferred reserve composition is Treasuries.