Overview
- On Thursday the Federal Reserve opened two formal proposals that translate the GENIUS Act into rule text and began a 60-day public comment period once the documents appear in the Federal Register.
- One proposal would force Fed-supervised payment stablecoin issuers to fully back tokens with permissible high-quality liquid assets such as short-term U.S. Treasury bills and to meet standardized capital and risk-management tests.
- The same draft adds rules for firms that safekeep reserve assets and clarifies that regulated payment stablecoins are not insured bank deposits.
- A companion proposal creates a tailored application path for insured state member banks to seek Fed approval for issuing stablecoins, including a 30-day notice-of-completeness step and a 120-day decision clock with procedures for hearings and appeals.
- The proposals also address rewards by treating many third-party yield arrangements as likely prohibited, prompted Governor Michael Barr to press for clearer anti-money-laundering enforcement thresholds, and leave final text subject to interagency coordination and public comment ahead of the agencies' targeted January 18, 2027 start for key issuer restrictions.