FDIC Proposes Stablecoin Rule Opening a Pathway for Bank Issued Tokens

GENIUS Act framework sets strict safety, liquidity, and governance standards for bank-affiliated stablecoin issuers.

2025-12-31

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On December 16, the FDIC proposed a rule to create a formal, bank-centric process for issuing payment stablecoins, designed to implement the GENIUS Act. The rule would apply to FDIC-supervised institutions, state nonmember banks, and state savings associations that want to issue payment stablecoins through a subsidiary. It aims to evaluate the safety and soundness of an applicant’s proposed activities based on statutory factors and to support responsible growth of digital assets while minimizing regulatory burdens.

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Under the GENIUS Act, only a permitted payment stablecoin issuer may issue payment stablecoins in the United States, and bank-affiliated issuers must operate as a subsidiary of an insured depository institution and be supervised by the institution’s primary regulator; for FDIC-supervised institutions, that regulator is the FDIC. The Act defines a payment stablecoin as a digital asset designed or used as a means of payment or settlement, redeemable for a fixed monetary value and expected to maintain a stable value relative to that amount, with other types outside this framework. The proposed rule translates this architecture into concrete filing procedures, standards, and timelines, and the FDIC aims to prioritize safety and soundness, support responsible growth in digital assets, and avoid unnecessary burden on supervised institutions.

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The rule would add a new section 12 CFR 303.252 to cover applications by FDIC-supervised institutions seeking a subsidiary to become a PPSI; the bank, not the subsidiary, is the applicant, and the application would be submitted as a letter to the appropriate FDIC regional office. In evaluating an application, the FDIC would focus on the subsidiary’s ability to meet GENIUS Act requirements for full reserve backing, monthly reserve disclosures, and upcoming capital, liquidity, reserve diversification, and risk-management standards; it would also assess the quality of management and any disqualifying felony convictions, as well as the strength and clarity of the redemption framework. The agency envisions a straightforward but substantive letter application, requiring a description of the stablecoin, the subsidiary’s activities, third-party roles, and intercompany arrangements, plus financial information, governance documents, and a set of policies and an engagement letter.