Fed Proposes New Framework For Bank-Issued Stablecoins
By CU Today Staff —
WASHINGTON—The Federal Reserve is proposing new capital, reserve and risk-management requirements for stablecoin issuers it supervises, filling in another major piece of the regulatory framework required under the GENIUS Act.
Under one of two proposals released Thursday, Fed-supervised payment stablecoin issuers would be required to fully back their tokens with permissible reserve assets, including short-term Treasury securities and other high-quality, liquid assets. The proposal would establish standardized capital requirements covering credit and operational risks, set risk-management standards and establish requirements for Fed-supervised firms safeguarding stablecoin reserve assets. It would also clarify permissible stablecoin related activities for Fed-supervised banks.
A second proposal would establish a tailored application process for Fed-supervised banks seeking to issue payment stablecoins, requiring applicants to provide a business plan and financial information and creating procedures for appeals, hearings and final decisions. The rules are part of the federal government's implementation of the GENIUS Act.
The Fed's action parallels GENIUS Act rulemaking already underway at other federal financial regulators. The OCC in February proposed its own framework covering reserves, capital, liquidity, custody and other requirements for issuers under its jurisdiction, while NCUA has separately been developing rules applicable to permitted payment stablecoin issuers under its supervision. The Fed's proposals are open for comment for 60 days following publication in the Federal Register.
Originally reported by CU Today.