Federal Reserve proposes stablecoin rules under GENIUS Act

• The Federal Reserve proposed rules governing payment stablecoin issuers supervised by the central bank.
• The proposals cover reserve assets, capital requirements, risk management and redemption rights.
• Public comments will remain open for 60 days after Federal Register publication.

The Federal Reserve Board has proposed two regulatory frameworks for payment stablecoin issuers under the GENIUS Act.

The proposals would require issuers to fully back stablecoins with permitted reserve assets, including short-term Treasury bills.

“Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions. This includes during market stress, when pressure can be put on the value of even otherwise liquid government debt, and during episodes of strain on the individual issuer or its related entities,” Federal Reserve Governor Michael S. Barr said in a statement.

The framework would establish standardised capital requirements addressing credit and operational risks from stablecoin activities.

It would also introduce risk-management standards and rules for firms safeguarding stablecoin backing assets.

The second proposal creates a tailored application process for supervised banks seeking approval to issue payment stablecoins.

Barr said the proposals should clarify universal redemption rights while addressing interest-rate and foreign-currency risks.

The initiative marks a direct shift toward a formal federal framework for payment stablecoin oversight.