Fed Unveils Proposed Framework for Stablecoin Issuers Amid GENIUS Act Deadline Looms

The Federal Reserve has unveiled comprehensive regulatory proposals for stablecoin issuers in an effort to integrate digital assets into the formal banking system.

The measures, which are part of the landmark Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), aim to regulate payment stablecoins by requiring them to be fully backed with permissible high-quality liquid assets, such as short-term Treasury bills.

The proposals also introduce standardized capital requirements designed to buffer against operational and credit risks, while prohibiting issuers from offering yield or interest solely for holding the digital tokens.

The Fed's actions coincide with coordinated rulemakings from peer regulators, including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, which aim to enforce strict operational standards ahead of the GENIUS Act's statutory enforcement deadline in January 2027.