U.S. regulators are swiftly establishing a framework for the country’s stablecoin oversight, as federal agencies ramp up efforts to create detailed regulations following the enactment of the GENIUS Act. This pivotal legislation aims to enhance the regulatory landscape for stablecoins in the financial system.
FDIC Develops Licensing Framework for Stablecoin Issuers
In testimony scheduled for December 2 before the House Financial Services Committee, the Federal Deposit Insurance Corporation (FDIC) indicated that it is nearing the release of a rule proposal regarding how payment stablecoin issuers can seek approval. This initiative marks a significant step in implementing the GENIUS Act, which was signed into law by President Donald Trump earlier this year.
The FDIC’s proposal is expected to be unveiled by the end of the month, with a subsequent proposal focused on prudential requirements for issuers supervised by the agency set for early next year. Following the release of the licensing proposal, the FDIC will collect public comments before finalizing the rule, a process that typically spans several months.
GENIUS Act Expands Oversight of Bank-Linked Stablecoins
The GENIUS Act establishes a national framework requiring both federal and state regulators to coordinate their supervision of stablecoin issuers. Under the Act, the FDIC will oversee and license subsidiaries of insured depository institutions that issue payment stablecoins.
The agency will set forth capital requirements, liquidity expectations, and reserve diversification standards. A considerable amount of regulatory work will continue throughout the coming year to meet the requirements laid out in the legislation.
Additionally, the FDIC is reviewing recommendations issued in July by the President’s working group on digital asset markets, which urged regulators to clarify the permitted digital asset activities for banks, including the tokenization of assets and liabilities.
Tokenized Deposits Under Regulatory Review
Apart from its stablecoin responsibilities, the FDIC is also preparing new guidelines to clarify how tokenized deposits will be treated under federal regulations. This area has gained traction as banks explore digital versions of traditional deposit products.
The upcoming guidance is expected to assist institutions in understanding which activities fall under supervisory limits and how they will be monitored.
Federal Reserve Coordinates Its Own Stablecoin Standards
Alongside the FDIC, the Federal Reserve will participate in the upcoming House hearing, with Vice Chair of Supervision Michelle Bowman detailing the central bank’s current work on stablecoin regulations. The Federal Reserve is collaborating with other banking regulators to develop capital, liquidity, and diversification standards required by the GENIUS Act.
The goal is to clarify the operations of banks engaged in digital asset activities and provide regulatory feedback as new use cases arise. This collaborative initiative aims to ensure that the banking system can support the growth of digital assets while maintaining stability and compliance.
Additional agencies are also advancing their obligations under the GENIUS Act. The Treasury Department has completed its public consultations, which concluded in November, and is in the process of crafting its regulations. These efforts will progress concurrently with those of the FDIC and the Federal Reserve, contributing to the broader national framework being developed to govern stablecoins across the United States.
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