The Federal Deposit Insurance Corporation has proposed a new rule under the GENIUS Act that would set standards for reserves, redemption, capital, risk management, and custody for stablecoin issuers operating through the banking system and institutions under FDIC supervision. The agency’s board approved the proposal and opened a 60-day public comment period.
Reserve deposits may be insured, but token holders are not
Under the proposal, reserve deposits backing stablecoins could qualify for FDIC insurance if those funds are held inside insured banks. That protection stops there. The agency said stablecoin holders themselves would not receive federal deposit insurance coverage and would not be treated as insured depositors.
FDIC officials said that classifying token holders as insured depositors would conflict with the statute. In the agency’s reading, that approach appears inconsistent with the GENIUS Act’s explicit prohibition on payment stablecoins being subject to federal deposit insurance.
Rule focuses on supervised issuance inside the banking system
The FDIC argued that the framework would still create a “secure environment” for stablecoin holders because payment stablecoins issued under this structure would be subject to higher regulatory and supervisory standards. The proposal centers on how issuance and reserve management should work inside supervised banking channels, rather than treating the tokens themselves as insured deposit products.
FDIC Chair Travis Hill said the sector has changed sharply over the past two years, pointing to a shift in the federal government’s posture, passage of the GENIUS Act, and continued technological development by banks and nonbanks. He added that work on stablecoin products and tokenized deposits is still advancing, with use cases continuing to expand.
GENIUS timeline set, annual audits required above $50 billion
The rulemaking effort follows the federal law signed in July, which placed stablecoin activity within a defined regulatory perimeter and gave the FDIC authority over issuers under its supervision. The law is scheduled to take effect on Jan. 18, 2027, unless it is implemented earlier.
Under the GENIUS framework, issuers must back stablecoins with U.S. dollars or similarly liquid assets. Issuers with market capitalizations above $50 billion must also undergo annual audits. The legislation also sets out how foreign-issued stablecoins should be handled in U.S. markets.
FDIC asks the public to respond to 144 questions
The consultation window includes 144 questions on how stablecoin issuers should be regulated. Tuesday’s release marks the second step in the FDIC’s GENIUS-related rollout. In December, the agency introduced an application path for banks seeking approval to issue stablecoins through subsidiaries.
Other U.S. regulators are moving at the same time. The Office of the Comptroller of the Currency has already outlined its own rules covering national bank subsidiaries and certain nonbank issuers, while the Treasury Department has moved to address oversight for smaller issuers at the state level.