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The Federal Reserve has proposed a broad regulatory framework for payment stablecoin issuers, moving forward with implementation of the GENIUS Act and efforts to bring dollar-backed digital assets further into the regulated U.S. financial system.
The Fed on Thursday released two proposals covering Board-supervised stablecoin issuers and banks seeking to enter the stablecoin market. The first would require issuers to fully back payment stablecoins with permitted reserve assets, including short-term U.S. Treasury bills and other high-quality, liquid holdings.
The framework would also establish standardized capital requirements to address credit and operational risks, along with risk-management standards for stablecoin activities. Rules would additionally cover companies responsible for safeguarding assets used to back payment stablecoins and clarify permissible stablecoin-related activities for Federal Reserve-supervised banks.
A second proposal would create a tailored application process for Board-supervised banks that want to issue payment stablecoins through subsidiaries. Applicants would need to provide business plans, financial information and other required documentation. The framework would also establish procedures for appeals, hearings and final regulatory decisions.
The measures represent another major step in implementing the GENIUS Act, legislation passed in 2025 that established a federal regulatory structure for payment stablecoins. Other U.S. financial regulators are also working on rules governing stablecoin issuers, including customer identification requirements intended to address money-laundering risks.
Federal Reserve Governor Michael Barr said reliable redemption remains critical to stablecoin stability. He emphasized that digital tokens should remain promptly redeemable at par even during periods of financial-market stress. Barr also called for further consideration of interest-rate and foreign-exchange risks and raised concerns about potential restrictions on the Fed's ability to address anti-money-laundering deficiencies.
Both Fed proposals will undergo a public consultation period lasting 60 days after publication in the Federal Register. Feedback from banks, stablecoin companies and other market participants could shape the final compliance, capital and operational requirements for institutions seeking to participate in the expanding U.S. stablecoin market.
