Federal Reserve Proposes New Rules for Stablecoin Issuers Under GENIUS Act

The Federal Reserve has unveiled new proposals aimed at regulating stablecoins under the U.S. regulatory framework, ahead of the enforcement of the GENIUS Act in 2027. The rules target payment stablecoin issuers, mandating that they maintain reserves fully backing their tokens and hold capital to cover operational and other risks.

Key to the proposal is the requirement for Board-supervised issuers to back their tokens with high-quality liquid assets, such as short-term U.S. Treasury bills. This ensures that stablecoins marketed as dollar-linked payment instruments have sufficient liquidity to support redemptions when users convert tokens back to dollars.

The Federal Reserve also introduced standardized capital requirements to address risks like cybersecurity threats, technology failures, and fraud. These measures align stablecoin issuers with risk-management standards applied to traditional financial institutions. Additionally, the proposal includes rules for firms safeguarding stablecoin reserves and a tailored application process for banks seeking approval to issue payment stablecoins.

The GENIUS Act, enacted in July 2025, requires regulators to develop rules for its implementation. The Federal Reserve’s September 2026 proposals are part of this process, translating the legislation into operating requirements for issuers and financial institutions. Compliance may increase costs for stablecoin companies but could offer banks clearer rules to enter the digital-dollar market.

Federal Reserve Governor Michael Barr emphasized that stablecoins must ensure reliable and prompt redemption, even during market stress. The proposal is open for public comment, with stakeholders having 60 days to respond after its publication in the Federal Register.