FDIC Unveils Stablecoin Regulatory Proposal Under the GENIUS Act

The Federal Deposit Insurance Corporation has officially rolled out its regulatory approach for stablecoin issuers, acting on its mandate under the Guiding and Establishing National Innovation for U.S. Stablecoins Act. Designed to align with a similar framework the Office of the Comptroller of the Currency introduced in February, the proposal opens a 60-day window for public comment, during which stakeholders can respond to 144 questions the agency has put forward.

As the primary regulator of U.S. depository institutions, the FDIC's role under the GENIUS Act focuses on banks and their subsidiaries that issue stablecoins. The proposal establishes preliminary standards around capital adequacy, liquidity management, and asset custody, although the final regulatory language won't be locked in until the agency reviews public input and completes its rulemaking process. This is the FDIC's second GENIUS Act-related action, building on a December proposal that addressed the stablecoin issuer application process.

A notable aspect of the proposal confirms that stablecoins will not be covered by federal deposit insurance, distinguishing them from conventional bank deposits. Regarding yield and rewards, the FDIC made clear that issuers cannot market their tokens as interest-generating instruments purely on the basis of holding or using them — a restriction that extends to third-party arrangements such as crypto exchanges. While this initially raised eyebrows among digital asset policy watchers, most industry insiders now believe well-structured rewards programs can still operate within the boundaries of the proposed rules.

The proposal also requires issuers to maintain an operational financial buffer beyond standard capital requirements, calculated using the prior year's operating costs. Additionally, tokenized deposits meeting the legal definition of a "deposit" would receive treatment consistent with existing banking regulations.

Broader legislative activity may yet reshape parts of the GENIUS Act, particularly with the Senate's Digital Asset Market Clarity Act still in progress. With Congress returning from recess and no Democratic agency appointees currently in place, Republican regulators are positioned to move the rulemaking forward largely on their own terms — even as the underlying law itself earned broad bipartisan support when enacted.