- The Federal Reserve has proposed new reserve, capital, and risk-management rules for stablecoin issuers as US regulators move closer to implementing the GENIUS Act.
The Federal Reserve on Thursday proposed two sets of rules governing payment stablecoin issuers under its supervision, advancing the US regulatory framework created by the GENIUS Act.
The proposals would require supervised issuers to fully back their stablecoins with permitted reserve assets, including short-term US Treasury bills and other high-quality liquid assets. They would also establish capital requirements for credit and operational risks and introduce risk-management standards.
The Fed said the proposals are designed to implement responsibilities assigned to it under the GENIUS Act, the federal law establishing a regulatory framework for payment stablecoins. The proposals are not final. The Federal Reserve will accept public comments for 60 days after publication in the Federal Register before moving toward final rules.
What the Fed's New Stablecoin Rules Would Require
The first proposal focuses on how stablecoin issuers manage reserves, capital, and operational risks. Under the framework, payment stablecoins issued by Fed-supervised firms would have to remain fully backed by eligible reserve assets. The proposed assets include short-term Treasury bills and other high-quality, liquid investments.
The proposal would also introduce standardized capital requirements intended to address credit and operational risks associated with stablecoin activities. The Fed is separately proposing requirements for supervised firms that safekeep assets backing stablecoins. The rules would establish standards for those custody activities while clarifying which stablecoin-related activities banks under Federal Reserve supervision can conduct.
Federal Reserve Governor Michael Barr said reliable redemption is central to making stablecoins function as payment instruments. He said holders should be able to redeem tokens at par even during periods of market stress.
Barr also raised a separate concern about anti-money-laundering supervision, saying he wants the final framework to address a proposed standard that could limit enforcement action to deficiencies deemed "significant or systemic."
How Banks Could Issue Stablecoins Under the GENIUS Act
The Fed's second proposal establishes a process for Fed-supervised banks seeking to issue payment stablecoins through subsidiaries. Applicants would need to provide a business plan and financial information, while the proposed framework would establish procedures for appeals, hearings, and final decisions.
The rules are part of a broader regulatory effort following passage of the GENIUS Act in 2025. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have also been developing rules for institutions under their respective supervision.
For stablecoin companies and banks, the next stage is the public-comment process. The final requirements could change before they take effect.
The proposals nevertheless provide a clearer picture of what US regulators expect from regulated stablecoin issuers: full reserve backing, additional capital, stronger risk controls and a defined supervisory process for banks entering the market.
The Fed's action also moves the US closer to a more detailed federal rulebook for stablecoins, an area that has become increasingly important as banks, fintech companies and crypto firms develop dollar-based digital payment products.