The Federal Deposit Insurance Corporation (FDIC) has developed a new regulatory framework that begins to define how US banks and their affiliates can issue and manage stablecoins. Under the GENIUS ActThis represents an important step in federal oversight of digital assets linked to the dollar.
In the proposed rule consent On April 7, the FDIC set requirements for “permitted payment stablecoin issuers” (PPSIs), which are expected to operate as affiliates of FDIC-supervised institutions. The framework sets standards for reserves, recovery practices, capital, liquidity, cybersecurity, and risk management, and is now open for a 60-day public comment period.
The proposal implements the provisions The law of geniusofficially known as the U.S. Stablecoin National Innovation Guidance and Establishment Act, directs federal banking regulators to create a uniform system for regulating the issuance of stablecoins in the United States.
Under the FDIC framework, issuers will be required to maintain full FDIC support. stablecoins On a 1:1 basis with eligible reserve assets. These reserves must be monitored daily and kept separately from other business activities. Eligible assets include U.S. currency, balances held at Federal Reserve banks, insured bank deposits, short-term U.S. Treasury securities, and certain overnight repurchase agreements.
The proposal also places concentration limits on reserve holdings and restricts exposure to counterparties. The FDIC said eligible reserve assets must remain highly liquid and low-risk to ensure the ability to recover during periods of stress.
Recovery standards constitute a key element of the rule. Issuers will be required to post clear redemption policies and generally process redemption requests within two business days. In cases where significant withdrawals exceed 10% of the outstanding issue within a 24-hour period, issuers must notify regulators and may request an extension.
FDIC’s Capital Liquidity Cybersecurity Framework.
The framework aims to address operational risks and financial stability concerns as the use of stablecoins in payments infrastructure expands, FDIC Chairman Travis Hill said in prepared remarks.
The proposal also introduces capital requirements for issuers. New private sector enterprises will be required to maintain at least $5 million in capital during their first three years of operation, with additional requirements likely based on supervisory assessment. Continuing capital shall consist primarily of Tier 1 Common Stock Instruments and Additional Tier 1 Instruments.
In addition, issuers will need to maintain a separate liquidity buffer equivalent to 12 months of operating expenses. The Federal Deposit Insurance Corporation (FDIC) has described this buffer as different from the reserve requirements that back issued stablecoins.
The rule addresses cybersecurity and operational resiliency, requiring issuers to maintain systems covering private key management, blockchain monitoring, incident response, and independent audits. Annual compliance certificates related to anti-money laundering and anti-terrorist financing programs are also required.
The FDIC has clarified that stablecoins issued under this framework will not receive deposit insurance protection under the standard $250,000 coverage limit. Reserves held in insured institutions will be treated as corporate deposits of the issuer, not individual stablecoin holders.
However, the proposal states that token deposits that meet the legal definition of a bank deposit will receive standard deposit insurance treatment regardless of the technology format used.
The work of the Federal Deposit Insurance Corporation (FDIC). He follows Previous enforcement efforts are related to the GENIUS Act and come in conjunction with parallel rulemaking by other banking regulators, including the Office of the Comptroller of the Currency.
The proposal is expected to be reviewed after the public comment process before final adoption. The GENIUS Act sets a legal deadline for implementation by mid-2026, putting pressure on regulators to finalize a unified stablecoin framework in the coming months.
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