US Banks to Issue Stablecoins: FDIC Advances Rulemaking Under GENIUS Act
The Federal Deposit Insurance Corp. (FDIC) has taken a significant step towards implementing the GENIUS Act by proposing a framework for regulated banks to issue payment stablecoins. This move marks an important milestone in the development of a comprehensive regulatory framework for stablecoins in the United States. The proposed framework outlines the requirements for banks to apply for approval to issue payment stablecoins through a subsidiary, with the FDIC evaluating both the subsidiary and its parent institution based on criteria such as financial condition, management quality, and redemption policies.
As reported by Bloomberg, the proposal is subject to a public consultation period before moving to the next stage of the rulemaking process. The FDIC’s proposed framework is a 38-page document that details the approval requirements for the issuance of payment stablecoins by subsidiaries of FDIC-regulated institutions. 
Excerpts from the FDIC’s proposed framework for bank-issued payment stablecoins. Source: FDIC
Key Provisions of the Proposed Framework
Under the proposal, banks would apply to issue payment stablecoins through a subsidiary, with the FDIC serving as the primary federal regulator and overseeing the subsidiary’s stablecoin payment activities. The GENIUS Act, which was signed into law by US President Donald Trump in July, establishes a comprehensive regulatory framework for payment stablecoins, including requirements that issuers maintain one-to-one reserve coverage with U.S. dollars or other approved high-quality liquid assets. 
US President Donald Trump signed the GENIUS Act on July 18th. Source: Associated Press
The GENIUS Act has been widely welcomed by the cryptocurrency industry, with executives from major companies such as Coinbase, Circle, Robinhood, and Gemini present at President Donald Trump’s signing of the law. Some industry participants see the legislation as a tool to strengthen US dollar liquidity and expand the dollar’s global reach through stablecoins, a view also echoed by US Treasury Secretary Scott Bessent. The total value of stablecoins in circulation has risen to over $300 billion worldwide, driven almost entirely by tokens pegged to the US dollar.
Implications and Next Steps
The FDIC’s proposed framework is a significant step towards the development of a comprehensive regulatory framework for stablecoins in the United States. The proposal is subject to a public consultation period, and the FDIC will consider feedback from industry stakeholders and the public before finalizing the framework. As the regulatory landscape for stablecoins continues to evolve, it is likely that we will see increased adoption and innovation in the use of stablecoins for payments and other financial transactions. For more information, visit https://cointelegraph.com/news/us-banks-issue-stablecoins-fdic-genius-act?utm_source=rss_feed&utm_medium=rss_tag_regulation&utm_campaign=rss_partner_inbound
