FDIC Proposes Rule for Banks Seeking to Issue Stablecoin Payments

In its first action to implement the GENIUS Act, the Federal Deposit Insurance Corporation (FDIC) is considering a proposed rule that would establish procedures under which the insured depository institutions the regulator supervises could seek to issue stablecoin payments.

“Under the proposal, the FDIC would adopt a tailored application process that would enable the FDIC to evaluate the safety and soundness of an applicant’s proposed activities based on the statutory factors while minimizing the regulatory burden on applicants,” FDIC Acting Chairman Travis Hill said in a Tuesday (Dec. 16) statement.

The FDIC board of directors approved a notice of proposed rulemaking that would implement these application provisions, and the agency will accept comments on the proposed rule for 60 days after its publication in the Federal Register, the FCIC said in a Tuesday press release.

The GENIUS Act allows FDIC-supervised institutions to issue stablecoin payments through a subsidiary, requires them to apply to the FDIC for the subsidiary to be approved as a permitted payment stablecoin issuer, and requires the FDIC to establish the application process and to receive and review applications, according to the release.

The proposed rule would cover the evaluation of applications based on the statutory factors, the processing of applications within specified timeframes, and the establishment of an appeals process for denied applications, per the release.

“This proposed rule is the FDIC’s first action to implement the GENIUS Act,” Hill said in his statement. “In the months ahead, we expect to issue a proposed rule to establish the statutorily mandated capital, liquidity and risk management requirements for subsidiaries of FDIC-supervised institutions that are approved to be PPIs [permitted payment stablecoin issuers], among other GENIUS Act-related workstreams.”

The GENIUS Act was signed into law by President Donald Trump on July 18, becoming the country’s first-ever piece of cryptocurrency legislation.

PYMNTS reported at the time that the GENIUS Act provided long-awaited policy framework and could signal a brand-new era for crypto in the U.S., or at least for stablecoins, which it was written to regulate.

Blockchain data provider Artemis Analytics said in October that more than $10 billion flowed through stablecoins in August for goods, services and transfers, up from $6 billion in February and more than twice the amount from August 2024.