FDIC Proposes Framework for Bank-Issued Payment Stablecoins
The FDIC has proposed a regulatory framework specifying how FDIC-supervised banks can apply to issue payment stablecoins through subsidiaries, in line with the US GENIUS Act. Banks would need to meet criteria related to issuance standards, financial stability, management quality, redemption policies, and overall safety. The FDIC would oversee these stablecoin activities, subject to public consultation before finalizing the rule. The GENIUS Act, signed into law in July 2024, sets federal standards for payment stablecoins, requiring one-to-one reserve backing with US dollars or other high-quality liquid assets. The law aims to enhance US dollar liquidity and maintain global dominance by expanding stablecoin use. The initiative is broadly supported by the crypto industry, and the FDIC’s move indicates increased federal involvement in regulating digital assets. The global stablecoin market, mostly composed of dollar-pegged tokens, now exceeds $300 billion in circulation.
