Fed Proposes Bank-Grade Rules for Stablecoin Reserves

The Federal Reserve on Sept. 24, 2026 opened a 60-day public comment period on two proposed rules implementing the GENIUS Act for payment stablecoin issuers it supervises. One proposal would require issuers to fully back tokens with high-quality reserve assets and meet bank-grade capital and risk-management standards. The other would create a formal application process for Fed-supervised banks that want to issue stablecoins through separate subsidiaries.

The first notice of proposed rulemaking would require issuers to hold permissible reserve assets at all times, naming short-term U.S. Treasury bills and other high-quality liquid assets as examples. The proposal would set standardized capital ratios tied to credit and operational risks from stablecoin activity, expand risk-management expectations and specify requirements for custody and safekeeping of reserves.

The proposal adds new reporting and failure-management mechanics. Issuers would file monthly reserve reports certified by their chief executive officer and chief financial officer. If reserves fall below one-to-one backing, an issuer would be required to notify the Federal Reserve and either restore reserves under a remediation plan or liquidate reserve assets and redeem outstanding stablecoins. The liquidation option is a supervisory mechanism for orderly wind-down of undercollateralized programs.

The second proposal lays out an application process for banks under the Fed’s supervision that seek approval to issue payment stablecoins through subsidiaries. Applicants would submit a business plan and financial information, and the framework describes procedures for appeals, hearings and final decisions. Some banks have already conducted pilot transactions; for example, a bank completed a live transaction on a public blockchain earlier this month.

The Federal Reserve described payment stablecoins as payment infrastructure and proposed applying bank-grade requirements to those activities for supervised firms. Both notices carry a 60-day comment window that begins when they are published in the Federal Register. Key provisions of the GENIUS Act take effect on Jan. 18, 2027. The agencies acknowledged they missed the statute’s original July 2026 deadline to complete implementing rules.

Other federal agencies are advancing parallel rules. The FDIC and the Office of the Comptroller of the Currency have proposed implementation rules for the institutions they supervise, and the Treasury Department issued a proposed rule in August covering issuance, offer and sale. In June, regulators proposed that permitted payment stablecoin issuers operate customer identification programs and be treated as financial institutions under the Bank Secrecy Act. Governor Michael Barr raised concerns within the Board about anti-money-laundering oversight in connection with the package.

Market reaction to the Fed’s proposals was muted. The proposals do not change holdings for existing stablecoin holders today; any final requirements will depend on the record the Fed compiles after reviewing public comments.