Federal Reserve Proposes Rules for Board-Supervised Payment Stablecoin Issuers
The Federal Reserve has finally proposed rules for Board-supervised payment stablecoin issuers under the GENIUS Act. The move completes the federal agency rulemaking picture and narrows the window before the January 18, 2027 enforcement cliff.
The Fed's two Notices of Proposed Rulemaking (NPRMs) provide a framework for stability, capital requirements, risk management standards, and rules for firms safekeeping backing assets. The proposals also define a gate for Board-supervised banks seeking to issue payment stablecoins, with a tailored application process that requires business plans and financial information.
While the proposals have been met with cautious support from Governor Michael Barr, he has expressed reservations about three areas where the final rule may look different from the proposal. These include public input on whether the rules adequately address interest rate and foreign currency risks, universal redemption rights to support public confidence in access to funds, and the 'significant or systemic' standard for anti-money laundering programs.
The GENIUS Act enforcement date is January 18, 2027, when it becomes unlawful for non-permitted issuers to issue payment stablecoins in the United States. The agencies will need to move at a pace that rulemaking rarely achieves, with only seven weeks remaining before the deadline.