U.S. FDIC Proposes Stablecoin Rules to Implement GENIUS Act Framework

The GENIUS Act, enacted on July 18, 2025, created the first comprehensive U.S. federal framework for payment stablecoins. It generally limits issuance in the United States to federally or state-qualified entities and extends obligations to exchanges, custodians and other digital asset service providers. The framework matters because it will determine how dollar-linked tokens, including those issued offshore, can be created, marketed and sold to U.S. customers.

The Treasury Department published a proposed rule on Aug. 18, 2026, defining terms including “issue,” “offer or sell” and “located in the United States,” with extraterritorial reach when transactions involve people in the country. Foreign issuers could qualify if their home regime is deemed comparable and they register with the Office of the Comptroller of the Currency. Comments are due Oct. 19; knowing participation in unlawful issuance can carry fines of up to $1 million per violation and as much as five years in prison.

The GENIUS Act creates a federal framework for payment stablecoins, setting standards for reserve backing, disclosures and regulatory oversight. Signed by President Donald Trump, the law is intended to give banks and nonbank issuers a clearer route to offering dollar-linked tokens. The Office of the Comptroller of the Currency is responsible for translating key provisions into detailed licensing, operating and risk-management requirements.

The OCC is accelerating its rulemaking and has pledged to issue final GENIUS Act regulations by November 2026. Applications from prospective stablecoin issuers are expected to begin in 2027, making the timetable important for firms preparing to enter the new federal regime. The final rules will determine how issuers qualify, demonstrate reserve compliance and operate under ongoing supervision.

Stablecoins are privately issued digital tokens designed to trade at par with the dollar, typically backed by cash and short-dated U.S. Treasuries. Critics compare them with banknotes from America’s 1837-1863 Free Banking Era, when fragmented issuance, discounts and runs undermined confidence. Supporters argue the analogy overlooks the modern regulatory architecture: commercial bank deposits and money-market fund shares are also private liabilities, and safety turns on reserve quality, redemption rights and supervision rather than whether the issuer is public or private.

President Donald Trump signed the GENIUS Act on July 18, 2025, creating the first federal framework for payment stablecoins. On May 25, 2026, Coinbase Chief Policy Officer Faryar Shirzad said roughly 90% of U.S. M2 already consists of private liabilities and argued the law addresses historical failure points through 1:1 reserves, par redemption, segregated custody and monthly attestations. Stablecoins outstanding were about $300 billion, led by Tether at roughly $190 billion and Circle at $76 billion, as agencies moved to implement the law.

Signed into law on July 18, 2025, the GENIUS Act established the first US federal regulatory framework for payment stablecoins. It requires issuers to maintain one-for-one reserves in cash and other highly liquid assets and sets standards for redemptions, disclosures and federal-state oversight. The implementing rules are critical for banks and crypto firms seeking regulatory certainty as dollar-backed tokens become more deeply integrated into payments and financial markets.

By the law’s first anniversary on July 18, 2026, the Treasury Department, Federal Reserve, OCC, FDIC, NCUA, SEC and CFTC had all failed to complete final rules by the statutory deadline. The Fed had not even issued a proposed rule. With no automatic interim regime to bridge the delay, issuers remain subject to existing laws while awaiting the new framework, which is scheduled to take effect no later than Jan. 18, 2027.

The GENIUS Act, passed in 2025, established a federal regulatory framework for payment stablecoins in the United States, shifting attention to how issuers will meet their anti-money-laundering obligations. Stablecoins can move quickly across borders and, without adequate identity checks, could be used for money laundering or terrorist financing. Whether issuers must identify customers in the same way as banks will therefore help determine the regulatory standard applied to crypto assets.

The latest draft, jointly proposed by regulators including the Federal Reserve and the Federal Deposit Insurance Corporation, would require stablecoin issuers to establish customer identification programs under the Bank Secrecy Act and collect and verify users' identities. The standards would be aligned with those for regulated banks. The proposal is an implementing measure for the 2025 GENIUS Act and remains at the proposal stage, with no final effective date. Reports also did not disclose any amounts involved.

U.S. President Donald Trump signed the GENIUS Act into law on July 18, 2025, creating the first federal framework for payment stablecoins, with requirements covering reserves, redemptions and anti-money-laundering controls. The law also preserves a state regulatory pathway. Issuers with aggregate circulation of no more than $10 billion may opt for state oversight if the state regime is substantially similar to the federal framework and receives approval from the Stablecoin Certification Review Committee.

The U.S. Treasury Department proposed its first implementing rules on April 1, 2026, setting out principles for assessing whether state regimes are substantially similar to the federal framework. The proposal was published in the Federal Register on April 3, opening a 60-day comment period that ran through June 2. On June 16, a bipartisan group of senators including Cynthia Lummis again urged the Treasury to specify the process and timeline for states to seek certification on an ongoing basis, preventing state oversight from being rendered ineffective.

The New York State Department of Financial Services established a state-level framework for U.S. dollar stablecoins in June 2022, requiring full reserves, redemption rights and independent attestations. After the U.S. GENIUS Act was signed into law on July 18, 2025, state regimes must be substantially consistent with federal standards, a requirement that will determine whether licensed issuers including Circle, Paxos and Gemini can continue operating.

NYDFS unveiled the proposal on June 9, 2026, opening a 10-day pre-proposal comment period to be followed by a 60-day consultation after formal publication. The rules would limit reserve concentration with any single custodian and cover seven categories of risk management, including internal controls, cybersecurity and internal audits. Issuers with $25 billion in circulation would have to hold at least 0.5% of reserves in safeguarded deposits each day, capped at $500 million. The rules would take effect alongside the GENIUS Act, with existing operators receiving a 12-month transition period.

Stablecoins use fiat currency reserves to maintain their value and have gradually become a settlement tool for payments and crypto markets. The United States enacted the GENIUS Act on July 18, 2025, generally allowing only qualified issuers to issue stablecoins domestically. The law brings reserves, redemptions, capital and oversight under a federal framework, affecting market access for banks, nonbank firms and foreign issuers.

The Office of the Comptroller of the Currency proposed rules on February 25, 2026, covering reserve assets, custody, redemptions, risk management, audits, registration and capital backing. The comment period runs through May 1. The following day, Comptroller Jonathan Gould testified before the Senate Banking Committee alongside officials from the Federal Reserve and FDIC, with stablecoins and digital assets emerging as key regulatory topics.

US President Donald Trump signed the GENIUS Act on July 18, 2025, establishing the first federal regulatory framework for payment stablecoins. The law covers issuer eligibility, reserve assets and redemption mechanisms. It takes effect on the earlier of 120 days after final rules are issued or 18 months after enactment. The consistency of rules across agencies will shape competition between banks and crypto companies.

On April 21, 2026, groups including the American Bankers Association and the Bank Policy Institute wrote to the Treasury Department, the Federal Deposit Insurance Corporation, FinCEN and OFAC. They asked the agencies to wait until the Office of the Comptroller of the Currency completes its issuer rules and then allow a comment period of at least 60 days. The banking groups said the three rules are interdependent and warned that finalizing them simultaneously could create inconsistent standards and enforcement conflicts.

U.S. President Donald Trump signed the GENIUS Act on July 18, 2025, establishing a regulatory framework for payment stablecoins. Although stablecoins must be backed by reserves such as U.S. dollars, they are not legally classified as bank deposits and therefore do not qualify for Federal Deposit Insurance Corp. coverage of up to $250,000 per depositor.

FDIC Chair Travis Hill recently said stablecoin holders would not receive deposit insurance under forthcoming GENIUS Act rules, and financial institutions could not obtain pass-through coverage through custodial arrangements. The FDIC plans to explicitly exclude such protection in its rules, meaning government-backed coverage will be $0 and users will bear the risk of issuer failure or losses to reserve assets.