US Regulators Move Forward with Stablecoin Framework
The US Federal Deposit Insurance Corporation (FDIC) is set to propose a framework for implementing US stablecoin laws later this month, according to its acting chairman Travis Hill. This move is part of the agency’s efforts to oversee the stablecoin-issuing subsidiaries of the institutions it supervises, as mandated by the GENIUS Act signed into law by President Donald Trump in July.
Hill stated that the FDIC has begun issuing rules to implement the GENIUS Act and expects to issue a proposed rule later this month to establish its scope of application. Additionally, the agency will submit a proposed rule implementing the GENIUS Act’s prudential requirements for FDIC-supervised payment stablecoin issuers early next year. The FDIC insures deposits at thousands of banks in the event they fail and is tasked with setting “capital requirements, liquidity standards and reserve asset diversification standards” for stablecoin issuers.
The GENIUS Act created oversight and licensing regimes for multiple regulators, with the FDIC playing a key role in regulating stablecoin issuers. Federal agencies such as the FDIC publish their proposed rules for public feedback, review submissions, and respond as necessary before publishing a final version of the rules. This process can take months.
Guidelines for Tokenized Deposits and Stablecoin Rules
The FDIC is also working on guidelines for tokenized deposits, considering recommendations released in July by the President’s Working Group on Digital Asset Markets. The report recommends clarifying or expanding the permitted activities in which banks are allowed to participate, including the tokenization of assets and liabilities. Hill stated that the FDIC is “currently developing guidance to provide additional clarity regarding the regulatory status of tokenized deposits.”
The Federal Reserve is also involved in the development of stablecoin rules, with Vice Chairman Michelle Bowman testifying that the central bank is “currently working with other banking regulators to develop capital, liquidity and diversification requirements for stablecoin issuers as required by the GENIUS Act.” Bowman emphasized the need for clarity on the treatment of digital assets to ensure that the banking system is well-positioned to support digital asset activity.
Regulatory Efforts and Public Feedback
The Treasury Department, which will also regulate some stablecoin issuers, including non-banks, began implementing the GENIUS Act in August and completed a second phase of public comment on its implementation proposal last month. The House Financial Services Committee hearing on Tuesday will include testimony from the heads of the Office of the Comptroller of the Currency and the National Credit Union Administration, both of which will play a role in implementing the stablecoin rules.
For more information on the GENIUS Act and its implications for the stablecoin market, visit Cointelegraph.
