US Federal Reserve proposes new stablecoin rules

On September 24, the US Federal Reserve unveiled proposed regulations for dollar-backed cryptocurrency tokens called stablecoins, as mandated by the GENIUS Act passed last year. The guidelines aim to establish a federal regulatory framework for these tokens.

The proposed rules stipulate that payment stablecoin issuers under the Fed's supervision must maintain full backing of their tokens with reserve assets like short-term Treasury bills. Additionally, the proposal introduces capital requirements for stablecoin issuers to mitigate credit and operational risks.

Should the regulations be enacted, they would provide guidelines for Fed-supervised banks that hold reserves on behalf of stablecoin issuers. The proposal also outlines activities that Fed-supervised banks can undertake related to stablecoins and sets forth a specific application process for banks seeking to issue their own stablecoins.

The Federal Reserve has invited public comment on the proposed new rules for a period of 60 days following their publication in the Federal Register.