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[BUSINESS] · United States · 11 sources

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Federal Reserve proposes stablecoin rules under GENIUS Act

The Federal Reserve has introduced two proposed regulatory frameworks to implement the GENIUS Act, a federal law enacted in 2025 to govern payment stablecoins. The proposals aim to provide legal clarity and ensure market stability for digital assets tied to the U.S. dollar.

The first proposal focuses on reserve requirements, mandating that Fed-supervised issuers fully back their stablecoins with 100% permissible, high-quality, and liquid assets. Eligible reserves include short-term U.S. Treasury bills and other low-risk holdings. This rule also establishes standardized capital requirements to manage credit and operational risks, alongside strict risk-management and safekeeping standards for firms holding these reserves.

The second proposal outlines a formal application process for insured state member banks to issue stablecoins through subsidiaries. This process includes requirements for submitting business plans and financial information, as well as established procedures for appeals and hearings.

Federal Reserve Governor Michael Barr emphasized that stablecoins must be capable of being reliably and promptly redeemed at par, even during periods of market stress. The Fed has opened a 60-day public comment period following the publication of these notices in the Federal Register.

Entities

Circle · Federal Reserve · Genius Act · Jerome Powell · Michael Barr · Solana Foundation · Tether

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