- FDIC moves to enforce GENIUS Act with a full prudential framework for stablecoin issuers.
- Redemption must be completed within two business days under normal conditions.
- No yield, no FDIC insurance claims, and no credit support for stablecoin purchase.
The Federal Deposit Insurance Corporation (FDIC) has approved a new proposed rule to implement key parts of the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act). The move sets a clear regulatory base for stablecoin issuers under FDIC oversight.
The rule targets banks and institutions that plan to issue payment stablecoins through subsidiaries. It defines how these products must be backed, redeemed, and managed.
As per a press release, public comments will remain open for 60 days after the proposal enters the Federal Register.
This marks the second GENIUS Act rule from the FDIC, following a December 2025 proposal that focused on approval procedures for banks entering the stablecoin market.
Core Framework: Issuance, Reserves, Redemption
The proposal focuses on four areas, i.e., issuance, redemption, reserve management, and limited custody services. Stablecoin issuers must fully back all tokens on a 1:1 basis using approved reserve assets.
These reserves must be clearly identifiable, disclosed monthly, and audited independently. If reserves fall below the 1:1 level, issuers must notify the FDIC immediately and present a fix plan.
Exposure to a single custodian is capped at 40% of total reserves. Issuers can hold reserves directly or through approved financial institutions.
Also, redemption rules are strict. Issuers must publish clear policies and process redemption requests within two business days under normal conditions.
Capital, Risk, and Operational Rules
The FDIC sets a minimum starting capital of $5 million during the early phase. After that, capital must match the business’s risk level.
In addition to capital, issuers must maintain a liquidity buffer. This buffer must cover at least 12 months of operating costs based on past data or projections.
Risk management rules require strong internal systems, audits, and controls. The framework scales with the size and complexity of the issuer.
The proposal also bans yield or interest offerings for holding stablecoins. The issuers cannot market these tokens as FDIC-insured and are also blocked from offering credit to fund stablecoin purchases.
The FDIC draws a hard line on insurance. Reserve assets backing stablecoins do not provide pass-through insurance to holders. These reserves are treated as corporate deposits of the issuer.
At the same time, the FDIC confirms that tokenized deposits remain deposits under existing law. The format does not change their legal status.
Meanwhile, in a separate statement, FDIC Chairman Travis Hill pointed to rapid progress in tokenization and stablecoins over the past two years. Development from banks and non-banks has accelerated, and use cases continue to expand.
Related: U.S. Treasury Seeks Public Comment on GENIUS Stablecoin Rules
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