Federal Reserve Opens Comment on First Stablecoin Rules Under the GENIUS Act

The Federal Reserve Board has requested public comment on two proposals that would build the supervisory framework for payment stablecoin issuers it oversees under the GENIUS Act, the stablecoin statute Congress passed last year. The first proposal requires issuers to back tokens fully with permissible reserve assets, names short-term Treasury bills and other high-quality liquid assets as qualifying, and sets standardized capital requirements covering credit and operational risk along with risk-management standards.

The second proposal governs the custody side. It sets rules for Board-supervised firms that safekeep the assets behind payment stablecoins and clarifies which stablecoin activities supervised banks may conduct, together with an application process for banks that want to issue. The comment period closes 60 days after publication in the Federal Register. The Fed's treatment of the statutory ban on issuers paying interest or yield to holders follows the approach the Office of the Comptroller of the Currency already proposed. That keeps the economics of reserve income with the issuer, not the holder.

The scale being regulated is substantial. Stablecoins in circulation total $312.14 billion, with Tether's USDT at $183.70 billion and Circle's USDC at $75.53 billion, according to DeFiLlama. A full-reserve requirement anchored in Treasury bills makes issuers structurally large buyers of short-dated government debt, which is the channel through which dollar stablecoin growth now feeds directly into the funding market.

The reporting relayed by Watcher Guru and BWE News treats the proposals as the moment the Fed takes operational ownership of the framework. For offshore issuers, the practical question is whether the Board-supervised path becomes the only route to institutional distribution in the United States. That would favor bank-affiliated issuers over crypto-native ones.