The Federal Reserve on September 24 requested public comment on two proposals to implement the GENIUS Act for payment stablecoin issuers supervised by the Board. The proposals would establish prudential standards for those issuers and a separate approval route for insured state-member banks that want to operate stablecoin-issuing subsidiaries, according to the Federal Reserve Board.
Reserve, capital and risk standards
According to the Federal Reserve Board, the proposed framework would require Board-supervised payment stablecoin issuers to maintain full backing with permissible reserve assets, including short-term Treasury bills and other high-quality liquid assets. It would also establish standardized capital and risk-management requirements. Together, the provisions would implement the GENIUS Act’s requirements through a supervisory framework for issuers under the Board’s oversight.
The Fed detailed the reserve, capital and risk-management elements in its proposed-rule document.
Bank subsidiary application process
A separate proposal would create a tailored application process for insured state-member banks seeking approval to establish stablecoin-issuing subsidiaries.
For applications deemed substantially complete, the Federal Reserve said it would generally issue a decision within 120 days. The proposed process is set out in a separate Federal Reserve document.
Federal Register comment deadline
The proposals are not final. The Fed said public comments will be accepted until 60 days after their publication in the Federal Register.
