FDIC proposes stablecoin rules under GENIUS Act

The Federal Deposit Insurance Corporation proposed detailed rules for firms that issue U.S. dollar–pegged stablecoins under the GENIUS Act, setting federal standards for reserves, capital, audits, disclosures and supervision.

“The proposal establishes minimum standards for reserve verification and redeemability,” the agency wrote in the notice of proposed rulemaking.

The draft rule applies to entities that create, maintain or redeem dollar‑pegged tokens and to business arrangements that provide stablecoin services. The agency said the framework would require issuers to hold and report reserves, limit the types of assets that may back coins, and provide independent verification of holdings.

Under the proposal, issuers must keep full, readily verifiable reserves that correspond to outstanding tokens and must segregate those reserves from other corporate assets. The rule would require custody arrangements that reduce the risk of commingling or rehypothecation and would call for regular attestations or independent audits to confirm reserve levels.

The FDIC would limit permitted reserve assets to highly liquid, low‑risk instruments. The draft also imposes capital and liquidity requirements to help issuers meet redemptions during periods of market stress. Issuers would be expected to conduct stress tests and maintain contingency plans.

The agency would require detailed recordkeeping and transaction reporting so regulators can monitor exposures and links between stablecoin issuers, banks and other market participants. The FDIC would have examination and enforcement authority to assess compliance and require corrective actions.

Consumer protections in the proposal include mandated disclosures to token holders about redemption rights, fees, reserve composition and counterparty risks. The rule sets expectations for cybersecurity, disaster recovery and governance. When an issuer is a bank or works with a banking partner, the proposal would operate alongside existing bank supervision and safety‑and‑soundness standards.

The FDIC is seeking public comment on specific provisions, including what assets may back stablecoins, the frequency and scope of attestations, and how rules should apply to sponsors, custodians and payment processors. The agency said it will consider operational concerns along with risk controls.

The regulatory effort follows several high‑profile failures in the digital‑asset market that raised questions about reserve adequacy, redemption mechanics and contagion risk. The GENIUS Act gave the FDIC authority to write standards aimed at ensuring reliable redeemability and risk management for stablecoins.

Industry groups, banks, fintech firms and consumer advocates are expected to submit comments during the public‑review period. The FDIC will review submissions, may revise the draft, and then decide whether to issue a final rule.