US Federal Reserve Seeks Comments on Two Stablecoin Issuer Proposals Under GENIUS Act
The US Federal Reserve Board has requested public comment on two proposals aimed at establishing a regulatory framework for supervised payment stablecoin issuers under the GENIUS Act. These proposals include requirements for full reserve backing, risk-management standards, and an application process for banks issuing stablecoins. The comment period will last 60 days following publication in the Federal Register.
Key Points of the First Proposal
The first proposal mandates that stablecoin issuers fully back their stablecoins with reserve assets such as short-term Treasury bills and other high-quality liquid assets. It also introduces standardized capital requirements to mitigate credit and operational risks, along with risk management standards.
These measures intend to enhance the reliability of stablecoins and reduce systemic risks associated with their circulation.
Second Proposal and Regulatory Procedures
The second proposal establishes an application process for banks aiming to issue payment stablecoins, requiring submission of comprehensive business plans and financial documentation for assessment.
Additionally, this proposal sets forth procedures for appeals, hearings, and final determinations regarding the applications. The public comment period will end 60 days after the proposals are published in the Federal Register.
Why it matters
The Federal Reserve's initiative marks a foundational step in establishing comprehensive federal regulation of stablecoins in the US, which are increasingly significant in payment systems. Although the GENIUS Act was signed in 2025 providing a legal framework, final rules have yet to be implemented. The new proposals aim to ensure financial stability of issuers and protect market participants, which is crucial for the development of decentralized finance and fostering trust in digital currencies.
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