The FDIC has taken a major step toward turning the GENIUS Act — the United States’ first federal stablecoin law — into actionable rules for banks and their fintech affiliates.
In a notice of proposed rulemaking approved by the FDIC Board, the agency outlines “a prudential framework” for permitted payment stablecoin issuers (PPSIs) supervised by the FDIC, and for insured depository institutions (IDIs) that provide custodial or safekeeping services tied to payment stablecoins. The proposal runs 197 pages and tackles many of the issues that have vexed banks and stablecoin teams since the GENIUS Act became law.
What the FDIC’s proposal covers
- Reserve composition and treatment: The rule addresses what assets can back payment stablecoins and how those reserve assets should be treated on a prudential basis.
- Redemption mechanics: It sets expectations around how redemptions must work in practice to protect users and reduce contagion risk.
- Capital and risk management: While the proposal outlines enterprise-level risk-management expectations, it does not yet set a specific minimum capital amount or ratio. Instead, the FDIC is asking for industry feedback on whether to adopt a formal capital framework later.
- Deposit insurance clarity: The FDIC would clarify how deposit insurance applies to funds held as reserves for payment stablecoins, including whether pass-through insurance will apply.
- Tokenized deposits: Any tokenized deposits that meet the statutory definition of “deposit” would be treated as deposits under the Federal Deposit Insurance Act, resolving uncertainty about whether digital-native deposit formats would get different treatment.
- AML and sanctions controls: The proposed rule requires a permitted payment stablecoin issuer to certify it has anti-money-laundering and sanctions compliance programs reasonably designed to prevent facilitation of money laundering or terrorist financing.
Narrow supervisory scope — for now
The rule is narrowly targeted at entities the FDIC supervises: subsidiaries of insured state nonmember banks and state savings associations (collectively, FDIC‑supervised IDIs) that receive approval to issue stablecoins through a subsidiary. Last December the FDIC published an earlier notice under Section 5 of the GENIUS Act establishing application procedures for IDIs that want approval to issue payment stablecoins.
What’s left unresolved
The FDIC’s proposal answers many technical and supervisory questions that have been top of mind for stablecoin issuers, but it deliberately leaves some of the harder calibration choices — most notably specific minimum capital requirements — to be worked out through the public comment process. The agency is explicitly soliciting feedback on those topics.
Why this matters
This proposal advances the GENIUS Act’s mandate to create a federal prudential framework for payment stablecoins. For banks and fintechs planning to issue or custody stablecoins, the FDIC’s rules will shape reserve practices, redemption flows, AML/sanctions expectations, and how deposit insurance applies — even as some big parameters remain open for industry input.
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