FDIC Unveils Framework Allowing U.S. Banks to Issue Stablecoins

U.S. banks may soon be able to issue payment stablecoins after the Federal Deposit Insurance Corporation (FDIC) introduced a proposed approval framework, marking one of the first concrete regulatory steps following the passage of the GENIUS Act earlier this year. The proposal signals a significant shift toward integrating stablecoins into the traditional banking system while providing regulatory clarity for financial institutions.

Under the proposed rulemaking, FDIC-supervised banks would be allowed to apply for permission to issue stablecoins through subsidiaries. As part of the process, banks must submit detailed applications explaining how their stablecoins will operate, including ownership structures, operational models, reserve management practices, and risk controls. The FDIC has opened a public comment period before finalizing the framework, allowing industry participants and the public to provide feedback.

The regulator emphasized that its review will prioritize safety, soundness, governance, and effective risk management. Stablecoins issued under the framework must be fully backed by fiat currency or equivalent highly liquid assets, in line with the requirements of the GENIUS Act. Applicants will also need to provide engagement letters from registered public accounting firms to ensure transparency and accountability.

Acting FDIC Chair Travis Hill stated that the approach would be tailored and flexible, aiming to assess risks without placing unnecessary regulatory burdens on banks. The FDIC noted it would only reject applications if proposed stablecoin activities are deemed unsafe or unsound. In some cases, applications could be automatically approved if regulators do not act within a specified timeframe. Approved issuers would remain subject to ongoing supervision, including capital, liquidity, anti-money-laundering, and sanctions compliance requirements.

While regulators expect a relatively small number of early applicants—around ten per year—the framework could unlock new revenue streams for banks. Stablecoins offer faster and cheaper transaction settlements compared to traditional payment rails, enabling banks to compete directly with crypto-native issuers. Major institutions, including Citigroup, are already exploring stablecoin payment partnerships, highlighting growing industry interest.

If finalized, the FDIC’s proposal would represent a major step toward mainstream adoption of regulated bank-issued stablecoins, potentially reshaping the future of digital payments in the U.S. banking sector.