Fed stablecoin proposal would make circulation a capital cost for supervised issuers
The Federal Reserve proposed an operational-risk capital formula for payment stablecoin issuers under its supervision. It starts with a charge based on stablecoins outstanding: 2% of the first $20 billion, 1.5% of the next $30 billion and 1% above $50 billion, plus 25% of average revenue from non-reserve assets. A loss-history adjustment and other charges may apply. For example, an issuer with $1 billion outstanding and no non-reserve revenue would face a $20 million baseline charge. This capital requirement is separate from the requirement to hold eligible reserves equal to coins outstanding. The proposal covers specified bank subsidiaries and qualifying state-chartered issuers transitioning to Fed supervision. The OCC's separate approach would tailor capital to each issuer and require liquid assets equal to 12 months of expenses. Both frameworks remain subject to rulemaking.
