FDIC Advances Stablecoin Application Framework Under GENIUS Act

TLDR

• The FDIC approved a proposed rule to create an application process for payment stablecoin issuance through subsidiaries.
• Applicants must detail activities, ownership structures, and include an engagement letter with a public accounting firm.
• The proposal focuses only on payment stablecoins and excludes other digital asset activities.
• The GENIUS Act requires full asset backing and annual audits for large stablecoin issuers above $50 billion.
• The FDIC plans further rules covering capital, liquidity, and risk management for approved stablecoin subsidiaries.

Federal regulators moved forward with a stablecoin rulemaking that outlines how insured institutions may issue payment stablecoins. The Federal Deposit Insurance Corporation approved a proposal establishing an application process for subsidiary issuers. The action follows passage of the GENIUS Act, which created a federal stablecoin framework.

Fdic Outlines Application Process For Payment Stablecoins

The FDIC approved a notice of proposed rulemaking during a board meeting on Tuesday. The proposal explains how institutions may apply to issue payment stablecoins through subsidiaries. The agency said applicants must clearly define proposed stablecoin activities and operational scope. It also requires detailed information on ownership and control structures. FDIC counsel Nicholas Simons described core application requirements during the meeting. He said submissions must include an engagement letter with a registered public accounting firm.

Simons stated the framework allows oversight while reducing regulatory burden on applicants. He said the proposal supports safety and soundness reviews of stablecoin activities. The FDIC opened the proposal for public comment following board approval. The agency plans to review feedback before advancing a final rule. Officials emphasized that the framework applies only to payment stablecoins issued by approved subsidiaries. The proposal does not address other digital asset activities.

Genius Act Sets Federal Standards For Stablecoin Issuers

President Donald Trump signed the GENIUS Act into law earlier this summer. The legislation established nationwide standards for stablecoin issuance and oversight. The law requires stablecoins to maintain full backing with U.S. dollars or highly liquid assets. It also sets audit requirements for large issuers. Issuers with market capitalizations above $50 billion must complete annual audits. The law applies to both domestic and foreign stablecoin issuers operating in the United States.

The GENIUS Act assigns implementation roles to federal banking regulators. The FDIC oversees insured institutions seeking stablecoin authority. Acting FDIC Chair Travis Hill addressed lawmakers earlier this month. He said the agency planned to issue an implementation framework in the coming weeks. Hill confirmed that work on additional rules continues within the agency. He said staff coordinated closely with other federal regulators.

FDIC Plans Further Rules On Capital And Risk Standards

During Tuesday’s meeting, Hill discussed future regulatory steps. He said the FDIC will propose capital, liquidity, and risk management requirements. The forthcoming proposal will apply to approved subsidiary stablecoin issuers. Hill said the agency expects to release the draft rule in the coming months. The FDIC intends to align stablecoin requirements with existing banking standards. Officials said consistency supports supervisory clarity for institutions.

The agency confirmed that public comment periods will accompany future proposals. Regulators plan to consider industry feedback before final adoption. FDIC officials reiterated that safety and soundness remain central goals. They said stablecoin activities must operate within established banking safeguards. The board did not set a final timeline for rule completion. However, officials said implementation efforts remain ongoing under the GENIUS Act.

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