FDIC Plans Regulations for Stablecoin Issuers

The acting leader of the Federal Deposit Insurance Corporation (FDIC) has announced intentions to propose rules for stablecoin issuers by the end of December. This information came during a testimony before the House Financial Services Committee, preparing for delivery on Tuesday.

The regulator’s agenda includes how to deal with stablecoin issuers seeking federal oversight through the GENIUS Act (Guidance and Establishment of the National Innovation for U.S. Stablecoins). According to the testimony, the FDIC has already begun drafting regulations to implement this act. They aim to release proposed regulations within this month, focusing on creating a framework that would cover prudential requirements for payment stablecoins overseen by the FDIC early next year.

The GENIUS Act outlines a collaborative oversight approach involving various federal and state entities for the stablecoin sector. After establishing the application process, the FDIC will also have the task of defining capital requirements for banks that want to issue stablecoins. Additional responsibilities include setting liquidity standards and ensuring reserves quality from issuers.

It’s important to note that federal agencies engaged in this rule-making will seek public comments for several months. Once the feedback is reviewed, regulators can finalize the regulations, which will typically be in effect for a significant duration.

Other agencies, including the Treasury Department, are also addressing parts of the GENIUS Act’s mandates.

In his testimony, Hill touched on further regulatory priorities. Reflecting on the recommendations from the President’s Task Force on Digital Asset Markets report earlier this year, he indicated that the FDIC is in the process of developing guidance to clarify the regulatory position of tokenized deposits.

During Tuesday’s House hearing, other regulators from banks and credit unions, including representatives from the Federal Reserve, will also give testimony. Cryptocurrencies have indeed been a hot topic among financial regulators in recent Congressional discussions.

Michelle Bowman, vice chair of the Federal Reserve Board of Governors for Oversight, stated in her testimony that the Federal Reserve is committed to establishing regulations concerning capital, liquidity, and diversification for stablecoin issuers as mandated by the GENIUS Act.