FDIC Releases First Prudential Rules for Stablecoin Issuance: 1:1 Reserves, Capital, and Cybersecurity Standards

The Federal Deposit Insurance Corporation (FDIC) has approved a proposed rule on April 7 that establishes a comprehensive regulatory framework for banks and their subsidiaries to issue and manage stablecoins under the GENIUS Act. The rule requires all permitted payment stablecoin issuers (PPSIs) to maintain 1:1 backing with high-quality liquid reserve assets, process redemptions within two business days, and hold at least $5 million in starting capital plus a liquidity buffer equal to 12 months of operating expenses. While stablecoins themselves are not covered by the standard $250,000 deposit insurance, tokenized deposits that meet the legal definition of bank deposits would be insured. The public has 60 days to comment, and final adoption is expected by mid-2026 per the statutory deadline set by the GENIUS Act.