Key Takeaways
The Federal Reserve proposed its first stablecoin rules under the GENIUS Act on September 24, opening a 60-day public comment period.
Payment stablecoin issuers would need full reserves in short-term Treasuries and other liquid assets, plus new capital and risk-management standards.
The framework has to be in place before the GENIUS Act takes effect in January 2027, setting the bar every US stablecoin issuer must clear.
The Federal Reserve asked for public comment on September 24 on two proposals that would set the first federal rules for companies that issue payment stablecoins, the dollar-pegged tokens now moving billions of dollars a day. The proposals build the framework the GENIUS Act called for when it was signed into law last year, and they arrive ahead of the law's January 2027 effective date.
The first proposal covers the money. It would require Board-supervised stablecoin issuers to hold full backing in permissible reserve assets like short-term Treasury bills and other high-quality liquid instruments, and it sets standardized capital requirements aimed at credit and operational risk. It also adds risk-management and safekeeping standards for the assets that sit behind each token, and spells out which stablecoin activities a Fed-supervised bank is allowed to run.
The second proposal covers the door. It creates a tailored application process for Board-supervised banks that want to issue a payment stablecoin, with business plans and financials required up front and a defined path for appeals, hearings, and final decisions.
Governor Michael Barr backed the proposals but flagged the anti-money-laundering piece, arguing supervisors should step in only when a problem is significant or systemic rather than for smaller lapses. The comment period runs 60 days after the rules publish in the Federal Register.
The most notable part of this is what full-reserve, audited, Treasury-backed stablecoins do to the argument that transparency has to be bolted on after the fact. A token that has to prove its backing looks a lot more like the transparent settlement rails SoFi and Mastercard are building and the bank charters regulators are handing to stablecoin firms like Bastion than the lightly audited tokens of a few years ago. Worth watching how many issuers can actually meet the bar.
People Also Ask
What did the Federal Reserve propose for stablecoins?
The Fed proposed two rules under the GENIUS Act, one setting reserve, capital, and risk standards for payment stablecoin issuers, and one creating an application process for banks that want to issue stablecoins.
What is the GENIUS Act?
The GENIUS Act is the federal law signed in 2025 that regulates payment stablecoins, requiring full backing by dollars or liquid assets and annual audits, with a January 2027 effective date.
What reserves would stablecoin issuers have to hold?
Under the proposal, Board-supervised issuers would back each token fully with permissible assets such as short-term Treasury bills and comparable high-quality liquid instruments.
When do the Fed's stablecoin rules take effect?
The public comment period runs 60 days after Federal Register publication, and the GENIUS Act framework is set to take effect in January 2027.