Fed Unveils Stablecoin Rules, Requiring Full-Reserve Backing and Bank-Grade Oversight
The Federal Reserve has unveiled rules for stablecoin issuers it oversees, requiring them to fully back their tokens with safe and liquid assets like short-term Treasury bills. The move is part of a multi-agency rollout of the GENIUS Act, which sets the first federal framework for dollar-pegged tokens.
The proposals, open for public comment until 60 days after Federal Register publication, would also establish standardized capital requirements to address credit and operational risks, set risk-management standards, and lay out rules for firms that safekeep the assets backing the tokens.
One proposal focuses on Board-supervised payment stablecoin issuers, requiring them to hold reserves entirely in permissible assets like short-term Treasury bills. It also sets standardized capital requirements to address credit and operational risks, risk-management standards, and rules for safekeeping reserves.
The second proposal creates a tailored application process for Board-supervised banks seeking to issue payment stablecoins, with procedures for appeals, hearings, and final decisions.