On Monday, the Federal Deposit Insurance Corporation (FDIC) announced proposed regulations designed to govern stablecoins under the recently enacted GENIUS Act. This act, signed into law by President Donald Trump last summer, mandates specific requirements for FDIC-supervised payment stablecoin issuers and banks participating in these activities.
The proposal outlines a comprehensive prudential framework encompassing reserve asset standards, redemption procedures, capital obligations, and risk management protocols for supervised stablecoin issuers. Importantly, the regulations explicitly state that stablecoins will not qualify for deposit insurance protections. Therefore, reserves backing payment stablecoins cannot be insured on behalf of token holders in the same manner as traditional bank deposits.
Additionally, the proposal stipulates that stablecoin issuers must redeem their tokens within two business days and prohibits any claims that these tokens yield interest or returns, including via third-party agreements. The rule clarifies that deposits represented by tokens will be treated identically to other deposit types under the Federal Deposit Insurance Act if they meet the statutory definition of a “deposit.”
Under the GENIUS Act, stablecoin issuers with less than $10 billion in outstanding tokens may opt for state-level regulation provided their state meets federal standards. Concurrently, the Treasury Department is formulating principles to assess state regulatory frameworks, with comments due by June 2, 2026.
The FDIC has opened a 60-day comment period upon publication in the Federal Register, seeking feedback on 144 specific questions within its proposal. Earlier in February, the Office of the Comptroller of the Currency (OCC) introduced its framework for stablecoin regulation.