Fed Proposes Full Reserve and Capital Rules for US Stablecoin Issuers

The Federal Reserve announced two draft rulemaking packages aimed at payment stablecoin issuers that would be supervised by the Board of Governors. The proposals, issued under the GENIUS Act, outline how stablecoins could be regulated in the United States.

Full‑Reserve Backing Requirement

Under the first package, any board‑supervised stablecoin issuer would be required to back all outstanding tokens with permitted reserve assets. The Fed cites short‑term Treasury bills and other high‑quality liquid assets as examples of acceptable reserves.

Standardized Capital and Risk‑Management Rules

The draft also calls for uniform capital requirements designed to cover credit and operational risks. It introduces broader risk‑management standards and rules governing how firms must safeguard stablecoin reserve assets.

Clarifications for Already‑Supervised Banks

For banks that are already under Federal Reserve supervision, the proposals would clarify which stablecoin‑related activities are permissible, addressing questions about reserve composition, capital, custody and supervisory oversight.

Application Process for New Entrants

The second package establishes a dedicated application process for banks seeking to issue payment stablecoins. Applicants would need to submit a business plan and financial information, and the framework would create formal procedures for decisions, hearings and appeals.

Public Comment Period

The rules are not final. The Federal Reserve is seeking public comment, with a 60‑day comment window that begins after publication in the Federal Register.

Key Statements

Fed Governor Michael Barr supported the direction of the proposals, emphasizing the importance of clear redemption rights and strong safeguards to ensure holders can redeem stablecoins at par even under stress.