Fed Proposes Stablecoin Rules as GENIUS Act Implementation Lags

The U.S. Federal Reserve has published two proposed rules that would govern stablecoin issuance by banks it supervises, marking its contribution to the multi-agency effort to implement the GENIUS Act. The proposals, released Thursday, are open for 60 days of public comment once they appear in the Federal Register.

One proposal would require Board-supervised stablecoin issuers to maintain reserves composed entirely of highly liquid, high-quality assets, such as short-term Treasury bills. It also sets standardized capital requirements to cover credit and operational risks, establishes risk-management expectations, and outlines rules for third-party custodians tasked with safeguarding the assets that back the tokens.

The second proposal creates a distinct application process for Board-regulated banks that want to issue their own stablecoins, requiring them to submit a business plan, financial details, policies, and other materials. It would also establish procedures for appeals, hearings, and final decisions.

The Fed's capital and reserve plan also touches on whether issuers can pay rewards on stablecoin holdings. Revenue models similar to credit-card incentive programs would be presumed to constitute prohibited interest or yield under the proposal, which the Fed said is consistent with the OCC's own approach. The regulators are leaving only a narrow window for such arrangements, according to CoinDesk.

The rules are the Fed's piece of a larger framework mandated by the GENIUS Act, signed into law in July 2025. The legislation tasked banking regulators and the Treasury Department with issuing regulations by July 2026—a deadline that has passed as the agencies finalize their individual components.

Governor Michael Barr, who previously led the Fed's supervision efforts, said in a statement that stablecoins must be reliably redeemable at par under all conditions, including market stress and strain on individual issuers.

Other agencies have advanced their own pieces of the rulemaking in recent months. The Treasury proposed definitions of stablecoin issuance and compliance last month, and the FDIC began its process in December. In June, multiple agencies put forward rules requiring stablecoin issuers to verify user identities in line with traditional finance, Decrypt noted.

The OCC is reportedly still working to finalize its own stablecoin rules by November, ahead of a January statutory deadline, while the Treasury's separate proposal would block platforms from selling noncompliant tokens to U.S. customers.

The rules land as stablecoins—blockchain tokens pegged to assets like the U.S. dollar—cement their role in crypto markets for trading, payments, and liquidity. The Trump administration has framed dollar-pegged tokens as a means of reinforcing the dollar's global position, with full-reserve backing and bank-grade oversight as central to that narrative.