Market Data 
The Federal Reserve has proposed two rules to help establish oversight for stablecoin issuers under the Guiding and Establishing National Innovation for US Stablecoins ($GENIUS) Act.
The proposals were announced by the central bank on Thursday and opened for public comment.
Stricter Stablecoin Oversight
The first proposal would require payment stablecoin issuers supervised by the Fed to fully back their tokens with approved reserve assets. These include short-term US Treasury bills and other high-quality liquid assets. The proposal also sets capital requirements for credit and operational risks. It would add risk management standards for stablecoin activities.
The institution also proposed rules for firms that hold assets backing stablecoins. The rules would clarify which stablecoin activities are allowed for banks supervised by the Fed. The second proposal, meanwhile, focuses on applications from supervised banks seeking to issue payment stablecoins. Banks would need to provide business plans, financial information, and other documents. The proposal also covers appeals and hearings for applications.
The public comment period will close 60 days after the proposals are published in the Federal Register. Fed Governor Michael Barr said stablecoins can only remain stable if users can quickly redeem them at full value. This should hold even during market stress or when the issuer and related companies face financial strain. He went on to add,
“I support the proposed rulemaking as a step in that direction within the framework provided by the $GENIUS Act, particularly as the rulemaking identifies key questions on which public feedback will be important. I am encouraged by provisions for reserve asset limitations, as well as transparent and standardized capital requirements. It will be useful to have public input on both of these aspects of the proposal, and in particular on whether the rule adequately addresses interest rate and foreign currency risks.”
Stablecoin Regulations Take Shape
The $GENIUS Act moved through Congress in 2025 as lawmakers sought to establish federal rules for stablecoins. President Donald Trump signed the legislation into law on July 18, 2025, making it a federal framework for stablecoin regulation. The Treasury Department, last month, proposed major federal definitions covering who can issue US stablecoins and which entities must comply with the law.
The Federal Deposit Insurance Corp (FDIC) had already begun its regulatory process in December, while several agencies in June proposed requiring stablecoin issuers to verify and identify users in line with existing financial regulations.
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