FDIC Proposes Stablecoin Rule for GENIUS Act Implementation
On April 10, 2026, the Federal Deposit Insurance Corporation ("FDIC") proposed a new rule to implement the requirements of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the "GENIUS Act") for permitted payment stablecoin issuers ("PPSIs") and FDIC-supervised custodians.
The proposed rule would establish a comprehensive regulatory framework for FDIC-supervised PPSIs. The proposal follows the FDIC's earlier proposed rulemaking in December 2025, which outlined the application procedures for banks seeking to issue stablecoins through a subsidiary. The OCC and the National Credit Union Association have also issued proposed rules under the GENIUS Act, as discussed in our prior Commentary, "The GENIUS Act in Action: The OCC Proposes Stablecoin Regulations." The FDIC's proposed rule generally follows these recent OCC and NCUA proposals.
Key Provisions of the FDIC's Proposed Requirements for Stablecoin Issuers
- Permitted and Prohibited Activities. PPSIs may engage in four "core" activities: (i) issuing payment stablecoins; (ii) redeeming payment stablecoins; (iii) managing reserves for payment stablecoins; and (iv) providing limited custody services. PPSIs are prohibited from paying interest or yield on stablecoins, pledging or rehypothecating reserve assets (subject to limited exceptions), and providing credit to customers to purchase stablecoins.
- Reserve Requirements. PPSIs must maintain reserves that fully back outstanding stablecoins at a 1:1 ratio, publish monthly reserve composition reports audited by a registered public accounting firm, and limit exposure at any single eligible institution to 40% of total reserve assets.
- Redemption. Stablecoins must be redeemable within two business days. If redemption requests exceed 10% of outstanding issuance within 24 hours, the PPSI must immediately notify the FDIC and may request an extension of the redemption period.
- Capital. The FDIC would establish a $5 million floor as a minimum capital requirement during a three-year de novo period. PPSIs must also maintain an operational backstop of highly liquid assets separate from reserves.
- Custody Standards. FDIC-supervised custodians must treat stablecoin reserves and collateral as customer property, protect assets from creditor claims, and, subject to limited exceptions, may not commingle customer assets with their own.
- Deposit Insurance Clarifications. Beneficial owners of stablecoins are not covered by the insurance of the FDIC. The proposal clarifies that deposits held as stablecoin reserves are insured only as corporate deposits of the PPSI, rather than on a pass-through basis. The proposal also confirms that tokenized deposits are not a separate category under the Federal Deposit Insurance Act.
The FDIC's latest proposal contributes to the broader effort by the United States to provide regulatory clarity and encourage PPSIs to operate onshore.
