FDIC stablecoin rule proposal faces industry pushback over GENIUS Act scope

The Federal Deposit Insurance Corporation’s draft rule to implement the GENIUS Act, which would govern payment stablecoins, has drawn criticism from crypto‑industry groups. Consensys urged the FDIC to revise provisions that it says could overextend the Act’s restrictions, warning that treating self‑custodial wallet providers as intermediaries and imposing automatic penalties for reserve or redemption shortfalls would harm users and limit access to decentralized finance tools.

The Blockchain Association warned that the proposal could unduly favor large banks, urging the agency to ensure reserve segregation and “super‑priority” treatment for stablecoin holders, and to avoid vague standards that would bar newer issuers. Both groups submitted comment letters in May, seeking a technology‑neutral, competition‑preserving framework that balances consumer protections with innovation.