**Fed Moves to Tighten Stablecoin Rules With Two New GENIUS Act Proposals** • The Federal Reserve has proposed two rules under the GENIUS Act to enhance oversight of stablecoin issuers, requiring full backing of tokens with approved reserve assets and setting capital requirements. • The first pro
Regulation & Gov ·
The Federal Reserve unveiled two regulatory proposals under the GENIUS Act framework to govern stablecoin issuers, establishing requirements that payment stablecoins be fully supported by approved reserve assets such as short-term US Treasury bills and other liquid holdings, alongside capital standards tied to credit and operational risks. Fed Governor Michael Barr characterized redemption reliability as essential, stating that stablecoins must maintain stability even when issuers face financial distress or market turbulence.
The first rule targets Fed-supervised stablecoin issuers and mandates risk management protocols for their activities, while the second establishes an application and approval pathway for banks seeking to issue payment stablecoins, requiring submission of business plans, financial documents, and providing for appeals processes. The proposals have opened for public feedback with a 60-day comment window following Federal Register publication.
The GENIUS Act, signed into law in July 2025, created the federal framework under which these rules operate. The Treasury Department has already issued regulatory definitions identifying eligible stablecoin issuers, while the FDIC and other agencies have begun separate compliance processes, including user verification requirements aligned with existing financial regulation standards.