The US Federal Reserve has proposed rules for payment stablecoin issuers under its supervision, as required by the GENIUS Act.
The proposal sets out rules for issuers of USD-backed cryptocurrency tokens known as stablecoins. It follows the requirements of the GENIUS Act, adopted in 2025, which established a federal regulatory framework for the tokens. The measures cover reserve backing, capital, custody arrangements, and the range of stablecoin-related activities that banks supervised by the Fed may undertake, according to Reuters.
Reserve and capital requirements
Under the proposal, payment stablecoin issuers supervised by the Fed would be required to fully back their tokens with certain reserve assets, such as short-term Treasury bills. The requirement links the tokens in circulation to assets held in reserve, with the proposal citing short-term government debt as an example of eligible backing.
The Fed would also impose capital requirements on these issuers. According to the proposal, the capital rules are intended to address certain credit and operational risks linked to stablecoin issuance. Taken together, the reserve and capital provisions cover both the assets supporting the tokens and the financial resources held by the issuers themselves.
In addition, the proposal extends beyond issuers to banks under the Fed's supervision. If enacted, the rules would introduce guidelines for supervised banks that custody reserves on behalf of stablecoin issuers, bringing the safekeeping of reserve assets within the scope of the framework.
The proposal would also outline the stablecoin-related activities that Fed-supervised banks can engage in, setting out which activities fall within permitted boundaries for these institutions. In addition, the Fed would establish a tailored application process for banks that want to issue their own stablecoins, creating a dedicated route for supervised banks seeking to become issuers.
GENIUS Act implementation and next steps
The proposal forms part of the implementation of the GENIUS Act, which requires federal rulemaking to give effect to its stablecoin framework. Through the process of addressing issuers, custodians and banks that may seek to issue tokens, the Fed's proposal covers several roles within the stablecoin ecosystem that fall under its supervisory remit.
The Fed will accept comments on the proposed rules for 60 days after they are published in the Federal Register. Stakeholders, including issuers and supervised banks, will be able to submit feedback during this period before the rules are finalised.
