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

On Thursday, the Federal Reserve Board sought public input on two proposals aimed at creating a regulatory structure for payment stablecoin issuers that are overseen by the Board, as per the GENIUS Act. The initial proposal suggests that these issuers would need to back their stablecoins with specific reserve assets, including short-term Treasury bills and other high-quality, liquid assets.

Additionally, this proposal would set standardized capital requirements to tackle credit and operational risks associated with payment stablecoin operations, alongside risk management standards, as mandated by law. Furthermore, the proposal would outline guidelines for Board-supervised entities that hold the assets supporting payment stablecoins.

It would also make clear the eligibility of stablecoin-related activities for Board-supervised banks. The second proposal introduces a customized application process for Board-supervised banks seeking approval to issue payment stablecoins. These institutions would need to present a business plan and financial details, among other paperwork.

The proposal also establishes a process for handling appeals, hearings, and final decisions regarding these applications. Public comments on these proposals will be accepted for 60 days after their publication in the Federal Register. For media inquiries, interested parties can email [email protected] or call (202) 452-2955. For more information, refer to the Federal Register notices: Application Procedures for Board-Supervised Insured Depository Institutions Seeking Approval for a Subsidiary to Issue Payment Stablecoins and Implementing the Federal Reserve Board’s Responsibilities under the GENIUS Act.