FDIC Advances Rulemaking For GENIUS Act: New Framework For Stablecoin Issuers

The Federal Deposit Insurance Corporation (FDIC) has moved to translate the country’s first crypto bill for stablecoins, the GENIUS Act, into concrete regulatory guidance for banks and their fintech subsidiaries that wish to use or issue stablecoins. In a notice of proposed rulemaking approved by the FDIC Board, the agency lays out “a prudential framework” for FDIC‑supervised permitted payment stablecoin issuers (PPSIs) and for insured depository institutions (IDIs) that provide custodial or safekeeping services tied to payment stablecoins. FDIC Issues GENIUS Act Rules The proposal addresses several core areas required under the GENIUS Act, including the composition and treatment of reserve assets, redemption mechanics, capital considerations, and enterprise‑level risk management expectations. It also clarifies how deposit insurance will apply to funds held as reserves backing payment stablecoins: the FDIC would make clear whether pass‑through insurance applies in those circumstances.