Payment stablecoin issuers would be required to fully back their stablecoins with certain permissible reserve assets, and banks applying to issue payment stablecoins would face a “tailored application process” under two proposals issued Thursday by the Federal Reserve.
Both proposals affect Federal Reserve-supervised payment stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and banks.
The Fed described the proposals as necessary for establishing a “regulatory framework” for agency-supervised payment stablecoin issuers under the GENIUS Act.
Under the first proposal, the Fed said, payment stablecoin issuers would be required to fully back their stablecoins with permissible reserve assets, such as short-term Treasury bills and certain other high-quality, liquid assets.
“The proposal would also establish standardized capital requirements to address certain credit and operational risks of payment stablecoin activities, as well as risk management standards, in accordance with the law,” the Fed said.
Separately, the agency said, the proposal would introduce rules for Fed-supervised firms that “safekeep the assets backing payment stablecoins.” The proposal would also clarify the permissibility of stablecoin and related activities for banks, the Fed said.
The second proposal would require banks applying to issue stablecoins to submit a business plan and financial information, among other documents. The Fed said that proposal would also create a process governing appeals, hearings, and final determinations for applications.
Both proposals were issued with 60-day public comment periods.
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