Federal Reserve Board Requests Public Comment on Two Proposals Related to Establishing a Regulatory Framework for Board-supervised Payment Stablecoin Issuers Under the GENIUS Act
WASHINGTON—In a significant move to shape the evolving digital asset landscape, the Federal Reserve Board on Thursday officially requested public comment on two sweeping proposals aimed at establishing a comprehensive regulatory framework for Board-supervised payment stablecoin issuers. The regulatory initiative is being advanced under the legislative authority of the GENIUS Act, a statutory framework designed to bring clarity, safety, and institutional oversight to the rapidly growing sector of privately issued digital currencies.
The announcement, released at 2:30 p.m. EDT, marks a pivotal step by federal banking regulators to integrate payment stablecoins into the traditional financial architecture while safeguarding consumers, financial stability, and the broader payment system. As stablecoins—digital tokens pegged to the value of fiat currency, most commonly the U.S. dollar—gain wider traction in commercial transactions and digital commerce, policymakers are increasingly focused on ensuring that these instruments maintain their value and function reliably under stress.
According to the Federal Reserve Board, the first of the two interrelated proposals focuses heavily on the operational safety, asset backing, and risk management standards required of institutions that issue payment stablecoins under direct Board supervision. Under this primary proposal, issuers would be legally and operationally mandated to fully back their circulating payment stablecoins with specific, permissible reserve assets. These designated assets would primarily include short-term United States Treasury bills and other select high-quality, highly liquid assets that can be rapidly converted into cash without significant loss of value during periods of market volatility.
In addition to stringent reserve backing requirements, the first proposal outlines standardized capital rules designed to address specific credit risks and operational vulnerabilities inherent in payment stablecoin activities. The framework incorporates rigorous risk management standards aligned with the statutory mandates of the GENIUS Act. Furthermore, the proposal introduces specialized regulatory rules specifically tailored for Board-supervised financial firms that provide safekeeping services for the reserve assets backing payment stablecoins. By clarifying the exact permissibility of stablecoin issuance and associated activities for Board-supervised banking organizations, the Federal Reserve aims to remove regulatory ambiguity that has historically hindered institutional participation in the digital asset space.
The second proposal released by the Board addresses the operational pathway for traditional banking institutions wishing to enter the stablecoin market. It establishes a specialized, tailored application process specifically for Board-supervised banks that intend to issue payment stablecoins. Under this administrative framework, prospective institutional applicants would be required to submit comprehensive documentation, including detailed business plans, robust financial information, and risk mitigation strategies, among other statutory filings.
To ensure fairness and transparency in the administrative process, the second proposal also outlines formal procedural rules governing appeals, administrative hearings, and final determinations regarding stablecoin applications. This structured yet accessible pathway is intended to provide banks with a clear and predictable mechanism to seek regulatory approval while maintaining the high supervisory standards expected of federally regulated financial institutions.
The release of these two proposals initiates a formal public consultation phase. The Federal Reserve Board has established a standard public comment period that will close exactly 60 days following the official publication of the documents in the Federal Register. During this window, industry participants, financial institutions, technology firms, consumer advocacy groups, and other interested members of the public are invited to submit detailed feedback, technical commentary, and analytical insights regarding the proposed regulatory structure.
The Federal Reserve Board noted that media inquiries regarding the proposals and the ongoing rulemaking process can be directed via email to [email protected] or by telephone at (202) 452-2955.
