Overview
- The Federal Reserve on Sept. 24 released two proposals and asked for public comment, opening a 60-day window after Federal Register publication for feedback on rules for Board‑supervised payment stablecoin issuers.
- One proposal would require issuers supervised by the Fed to fully back payment stablecoins with permissible reserve assets such as short‑term U.S. Treasury bills and to meet standardized capital, risk‑management and custody rules.
- The second proposal lays out a tailored application process for insured state member banks to seek approval for a subsidiary to issue payment stablecoins, requiring a business plan, financial disclosures and procedures for appeals and hearings.
- Under the Fed’s draft application mechanics, the bank (not the subsidiary) files the application, the Fed must notify within 30 days if the filing is substantially complete, and the GENIUS Act gives the Fed 120 days to decide on a complete application before it is deemed approved.
- The rules join concurrent Treasury and OCC rulemaking, will not make stablecoins into insured deposits, and could affect bank consortia planning dollar tokens and the timing for industry rollouts ahead of Treasury’s cited Jan. 18, 2027 effective date for key issuer restrictions.