FDIC drafts rules for tokenized deposit insurance

Acting Chairman of the Federal Deposit Insurance Corporation (FDIC) Travis Hill said the regulator plans to publish guidance on tokenized deposit insurance and new rules for stablecoin issuers by the end of 2025. He spoke about this at a Federal Reserve Bank of Philadelphia conference, stressing that moving bank deposits onto a blockchain does not change their legal nature.

Traditionally, the FDIC insures customer deposits if a bank fails. Against the backdrop of Wall Street’s and regulators’ growing interest in tokenizing real-world assets (RWA), Hill’s agency is now discussing how to fit bank deposits and stablecoins into this picture.

According to Hill, the FDIC is preparing a new framework for stablecoin issuers under its supervision. It is expected to include requirements for capital, reserve structure, and risk management so that banks and other licensed institutions can issue stablecoins in a predictable and clear regulatory environment.

In practice, tokenized deposit insurance could look like banks issuing tokens on a permissioned blockchain, with each token representing an insured claim on a customer’s deposit. These tokens could sit in wallets controlled by customers or fintech providers, move between platforms, and still be fully backed by entries on bank balance sheets and covered by FDIC insurance.

If a bank runs into trouble, smart contracts and entries in a distributed ledger could, at least in theory, speed up the calculation of insurance coverage and automate the transfer of insured amounts to a successor bank or directly to the customer. In parallel, regulators would need to set rules for how such products are marketed, reported, and reflected on balance sheets as tokenized liabilities.

For now, the exact relationship between tokenized deposits and stablecoins remains an open question. Tokenized deposits represent insured claims on a specific bank and are available only to customers who pass standard KYC procedures. Stablecoins remain a separate class of digital assets used for payments and trading and typically do not carry federal deposit insurance.

This is where the GENIUS Act comes into play — the first comprehensive federal proposal on payment stablecoins in the United States. It defines who can issue such tokens, what assets can back them, how to disclose reserve information, and what compliance and anti-money-laundering standards must be met.

At the same time, the GENIUS Act draws a line between payment stablecoins and bank deposits. The latter, including their tokenized form, remain under traditional bank supervision and the deposit insurance system. The FDIC’s upcoming guidance on tokenized insurance and stablecoin applications is meant to connect these two reform tracks so that users can clearly see when they are dealing with an insured digital deposit and when they are holding a stablecoin that has no FDIC protection.