Federal Reserve Proposes Capital Charges and Bank Approval Rules for Stablecoins

The Federal Reserve has released a proposal that would impose new capital requirements on stablecoin issuers and establish a framework for banks seeking approval to work with stablecoins.

Redemption Timeline for Issuers

Under the proposal, covered stablecoin issuers would generally be required to redeem tokens within two business days of a redemption request.

Bank Approval Process

Bank applications to provide services to stablecoin issuers would be subject to the decision timeline set by the GENIUS Act, which mandates a maximum of 120 days for regulatory approval.

Regulatory Context

The measures are part of broader efforts by U.S. regulators to increase oversight of stablecoins and ensure that financial institutions maintain adequate capital buffers when dealing with these digital assets.