The US Federal Deposit Insurance Corporation (FDIC) has submitted a proposal for a new regulatory framework targeting stablecoin issuers, marking a significant step in the evolving state oversight of the crypto sector. This move forms part of ongoing regulatory efforts required by the GENIUS Act, signed into law last year by then-President Donald Trump, which established clear federal standards for the rapidly growing stablecoin market. With this proposal, the FDIC has also launched a public comment period, inviting feedback from stakeholders and the broader public.
New regulatory standards and legal foundation
Under the FDIC’s proposal, stablecoin issuers would be subject to more clearly defined standards, particularly around the management and backing of their reserve assets. The GENIUS Act stipulates that stablecoins must be fully backed by either the US dollar or similarly high-liquidity assets. Issuers exceeding certain market capitalization thresholds would face mandatory annual audits, while those operating from abroad would be required to comply with special regulations tailored to cross-border issuance.
The FDIC has highlighted the shifting landscape in traditional finance’s approach to cryptocurrencies, noting increased interest from crypto firms in obtaining banking licenses. According to the agency, both technological innovation and regulatory pressure have propelled major changes within the sector over the last two years. Notably, the trend of banks and non-financial firms offering stablecoin and token-based deposit products factored heavily into the design of the proposed rules.
Sector implications and interagency cooperation
The extensive 191-page proposal, however, is narrowly targeted. Under the GENIUS Act, only select institutions would fall under the new rules, primarily stablecoin issuers that are subsidiaries of federally insured depository institutions or entities directly licensed by federal or state authorities.
Issuers covered by the regulation would be obligated to comply with strict reserve management and risk controls. FDIC attorney Chantal Hernandez underscored the aim to clarify the status of deposits held as reserve assets and whether they enjoy federal deposit insurance protection.
During a recent meeting, Chantal Hernandez stated that the link between reserve assets and deposit insurance would be clarified further under the new framework.
FDIC officials reiterated that payment stablecoins will not be guaranteed by the US Treasury or covered by federal deposit insurance—key distinctions aimed at preventing customer misunderstanding. Eugene Frenkel, representing the FDIC, emphasized that the GENIUS Act leaves no ambiguity on this point, drawing a clear line regarding the limits of federal guarantees.
Eugene Frenkel noted that payment stablecoins fall outside US government guarantees and are not federally insured as deposits.
Operating with the mandate to promote financial stability and protect depositors, the FDIC has worked closely with partner agencies as crypto regulations gather pace. The Office of the Comptroller of the Currency, in light of recent legislative shifts, has published its own set of rules, further defining the regulatory landscape for digital assets. Just last week, the Treasury Department released a draft regulation proposing enhanced oversight for smaller stablecoin issuers at the state level, signaling an expanded role for government supervision in the market.
