FDIC Prepares Regulatory Framework to Guide US Stablecoin Market
Later this month, the US Federal Deposit Insurance Corporation will present a framework for putting US stablecoin laws into effect. Its acting chair, Travis Hill, disclosed this. In a prepared statement that he will present to the House Financial Services Committee on Tuesday, he shared his opinions. The government will also propose a regulation to implement the prudential requirements of the GENIUS Act for stablecoin issuers supervised by the FDIC early next year, he noted.
The FDIC has begun work to promulgate rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our application framework later this month,
Hill
FDIC to Set Capital, Liquidity, and Reserve Rules for Stablecoins
In July, President Donald Trump signed the GENIUS Act. Several regulatory authorities now have supervision and licensing procedures in place due to this statute. Thus, it allowed the FDIC to monitor stablecoin-issuing subsidiaries of the organizations it regulates. Deposits in thousands of banks are insured by the FDIC in case they fail. According to Hill, it will also be responsible for establishing reserve asset diversification, liquidity, and capital criteria for stablecoin issuers under the GENIUS Act.
The FDIC and other federal agencies publish their proposed rules for public comment. After reviewing the input, they react if needed. Before the final rules are issued, this process may take many months. Some stablecoin issuers, including non-banks, will be subject to Treasury regulation. The Treasury will regulate non-bank stablecoin issuers as well. In August, it started carrying out the GENIUS Act. It concluded a second round of public feedback on its proposed implementation last month.
Federal Regulators Work Together on Stablecoin Capital Rules
In his remarks, Hill stated that the FDIC has taken into account suggestions that were released in July. The President’s Working Group on Digital Asset Markets made these suggestions.
The report recommends clarifying or expanding permissible activities in which banks may engage, including the tokenization of assets and liabilities We are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenized deposits,
Hill
Michelle Bowman, the vice head of the Federal Reserve‘s oversight committee, is scheduled to testify on Tuesday. She will clarify that other bank authorities are collaborating with the central bank. As mandated by the GENIUS Act, their objective is to provide capital, liquidity, and diversification regulations for stablecoin issuers.
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