Federal Reserve Proposes Stablecoin Rules Requiring Treasury Backing
The Federal Reserve has proposed rules for stablecoin issuers, requiring them to back stablecoins with high-quality, liquid assets such as Treasury bills. The rules aim to address credit and operational risks, and would impose capital requirements on issuers.
The proposed regulations are part of the Genius Act, which requires federal regulators and the Treasury Department to establish a comprehensive federal regulatory framework for stablecoins by July. However, the Federal Reserve is behind in doing so, as other agencies such as the Office of the Comptroller of the Currency and the National Credit Union Administration have already proposed their own rules.
Fed Gov. Michael Barr emphasized that stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions, including during market stress or strain on the individual issuer or its related entities.