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      Federal Reserve Proposes New Rules for Stablecoin Issuers Under GENIUS Act

      The Federal Reserve has introduced a set of proposals aimed at regulating payment stablecoin issuers, marking a significant step in the implementation of the GENIUS Act's regulatory framework. The proposals mandate that stablecoins issued by firms under the Board's supervision must be fully backed by permitted reserve assets, which include short-term Treasury bills and other high-quality liquid assets. Additionally, standardized capital requirements will be established to address credit and operational risks associated with stablecoin activities, along with comprehensive risk management standards.

      In a separate proposal, the Federal Reserve aims to create a tailored application process for banks seeking approval to issue payment stablecoins. This process will require banks to provide detailed information, including a business plan and financial documentation. The framework will also outline procedures for appeals, hearings, and final decisions regarding stablecoin applications, ensuring a structured approach to the approval process.

      These proposals build on previous efforts by federal banking regulators to implement the GENIUS Act. Earlier this year, in June, the Federal Reserve and other agencies suggested that permitted payment stablecoin issuers must operate customer identification programs and be treated as financial institutions under the Bank Secrecy Act. The GENIUS Act establishes a federal framework for payment stablecoin issuers, with regulators tasked with developing requirements related to reserves, capital, liquidity, and risk management.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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