Federal Reserve Proposes Stablecoin Reserve and Capital Rules

The Federal Reserve announced two rule proposals aimed at payment stablecoin issuers it supervises. The proposals are part of the broader regulatory rollout required by the GENIUS Act.

Full Reserve Backing Requirement

The first proposal would mandate that stablecoin issuers hold reserves entirely in permissible, high‑quality liquid assets, such as short‑term Treasury bills. It also sets standardized capital requirements, risk‑management standards, and safekeeping rules for firms that hold the backing assets.

Application Process for Banks

The second proposal creates a tailored application process for banks that wish to issue payment stablecoins. Applicants would need to submit a business plan and financial information, and the rule outlines procedures for appeals, hearings, and final decisions.

Regulatory Context

These proposals add the Federal Reserve’s component to a multi‑agency effort under the GENIUS Act, which also includes pending rules from the Office of the Comptroller of the Currency and the Treasury Department. The comment period will close 60 days after publication in the Federal Register.