The Federal Reserve Board has initiated a 60-day public comment period on two regulatory proposals aimed at governing payment stablecoin issuers under the GENIUS Act. The proposals outline requirements for reserve assets, capital standards, and a tailored application process for banks seeking to issue stablecoins.
The framework mandates that stablecoin issuers fully back their tokens with permissible reserve assets, including short-term Treasury bills and high-quality liquid assets. Standardized capital requirements and risk management protocols are proposed to mitigate credit and operational risks associated with stablecoin operations.
Rules would also govern the safekeeping of assets by firms supervised by the Federal Reserve, alongside clarifications on whether banks may engage in stablecoin activities. The application process for banks would necessitate detailed submissions, including business plans and financial data, with mechanisms for appeals and final decisions.
Comments must be submitted within 60 days of the proposals’ publication in the Federal Register, reflecting the Fed’s commitment to stakeholder input in shaping the stablecoin regulatory landscape.
Written by Kate Harper
Economics Desk
