The Federal Deposit Insurance Corp. (FDIC) has put forward a regulatory proposal outlining the conditions under which US banks and their fintech subsidiaries may engage with stablecoins, as digital asset activity within the banking sector continues to grow. The proposal, subject to public comment, addresses reserve asset requirements, stablecoin redemption processes, permissible activities, and capital standards.
The FDIC chair presented the measures at the agency's board meeting in Washington, noting that progress in digital assets, technological development by financial institutions, and the current administration's support for the crypto sector have accelerated the expansion of stablecoin and tokenised deposit products, with use cases continuing to multiply.
Regulatory context and legislative backdrop
The proposal sits within a broader coordinated rulemaking effort involving the FDIC, the Office of the Comptroller of the Currency (OCC), and the Federal Reserve. This follows the passage of the Genius Act, which requires stablecoin issuers to formally register and maintain dollar-for-dollar reserves in backing assets.
The FDIC's regulatory activity in this space has been building over recent months. In December 2024, the agency launched a framework enabling banks to apply to issue payment stablecoins through a subsidiary structure. The OCC followed with its own measure in February 2025. The current proposal extends that work by seeking to 'reaffirm by regulation that deposits in tokenised form remain deposits under the Federal Deposit Insurance Act', according to the FDIC chair's prepared remarks.
The agency is seeking feedback on 144 specific questions, covering areas including permissible and prohibited activities, capital requirements for stablecoin issuers and their parent companies, the FDIC's approach to pass-through insurance, and the prohibition on yield-bearing stablecoins.
Industry and prudential implications
The proposal lands amid ongoing tension between traditional banks and crypto firms over digital asset regulation, including disputes over access to bank charters. The framework is expected to be broadly welcomed by the industry: crypto firms stand to gain a clearer path to regulatory legitimacy. At the same time, banks will scrutinise the details to assess whether fintech companies are afforded scope to operate in ways that overlap with conventional lending activities.
Prudential concerns remain on the table. A Federal Reserve governor has previously cautioned regulators to monitor potential money laundering risks and financial stability implications as stablecoin frameworks take shape. The public comment process on the FDIC proposal will provide a further opportunity for such considerations to be formally addressed.
