Banks wishing to issue payment stablecoins would need to follow an application procedure outlined in a proposed rule issued Tuesday by the board of the federal bank deposit insurance agency.
The proposal, if finalized, would execute application provisions contained in the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), the Federal Deposit Insurance Corp. (FDIC) said Tuesday. The board proposed the rule during its meeting, also Tuesday.
According to the FDIC, the GENIUS Act – enacted earlier this year — allows banks to issue payment stablecoins through a subsidiary and to engage in “certain related activities.”
“An FDIC-supervised state nonmember bank or state savings association seeking to issue payment stablecoins through a subsidiary is required to apply to the FDIC for the subsidiary to be approved as a permitted payment stablecoin issuer,” the agency said in a release.
Under the new law, the FDIC is required to receive and review applications and to issue implementing regulations establishing the application process. “The proposed rule would implement the requirements of section 5 of the GENIUS Act with respect to evaluating applications based on the statutory factors, processing applications within specified timeframes, and establishing an appeal process for denied applications,” the FDIC said.
Comments on the proposed are due 60 days after its publication in the Federal Register.
Also resulting from Tuesday’s FDIC Board meeting:
- A final rule was approved aimed at “streamlining” processes for the establishment and relocation of domestic branches and main offices. The agency said the rule is intended to “improve the speed and certainty of, and reduce the regulatory burden associated with, branch and main office filings,” and is substantially similar to the proposal issued in July, with minor changes. Among other things, the rule provides that most filings qualifying for expedited processing will be deemed approved three business days after submission (and, it eliminates the agency’s discretion to remove filings from expedited processing). It takes effect 60 days after publication in the Federal Register.
- An interim final rule was issued on amending the collection of the special assessment meant to restore the agency’s deposit insurance fund (DIF) after covering losses of two, large regional bank failures in 2023. According to the FDIC, the rule is meant to ensure the agency collects the correct amount through the special assessment, equal to the total losses attributable to the “systemic risk exception,” without overcollecting or undercollecting. The assessment covers losses related to the failures of Silicon Valley Bank of Santa Clara, Calif., and Signature Bank of New York N.Y.
- The 2026-30 strategic plan for the agency was approved, with a top goal to “protect FDIC-insured deposits from loss without recourse to taxpayer funding.” Another top goal of the plan is that “large, complex financial institutions are resolvable in an orderly manner.”
All items issued or proposed by the board were made unanimously.
FDIC Board of Directors Approves Final Rule on Establishment and Relocation of Branches and Offices