Banks Can Soon Issue Stablecoins: FDIC Begins Rulemaking Under GENIUS Act

The Federal Deposit Insurance Corporation just fired the starting gun. Traditional banks are now cleared to enter the stablecoin race, with the FDIC initiating formal rulemaking under the newly minted GENIUS Act. This isn't a trial balloon—it's a regulatory green light.

The New Playbook

Forget speculative crypto wildcatters. The move hands the keys for dollar-pegged digital currency directly to the nation's most heavily regulated institutions. It bypasses years of regulatory limbo and cuts a direct path for banks to mint, manage, and distribute their own stablecoins. The subtext? Stability and trust, stamped with a familiar bank logo.

Why This Changes Everything

The implications are seismic. It legitimizes a core pillar of crypto infrastructure by placing it under the same umbrella as checking accounts and mortgages. Liquidity pools could deepen overnight. Institutional adoption gets a turbocharged on-ramp. Suddenly, the phrase 'bank-issued digital dollar' isn't a contradiction—it's a coming reality.

One cynical finance jab? Wall Street finally found a blockchain use case it loves: printing digital money with a government seal of approval. The GENIUS Act might just live up to its name—or become the ultimate case of old wine in a very new, very transparent bottle.

FDIC’s First Move On GENIUS Act

In a statement, Acting Chair Travis Hill emphasized that the proposed process is tailored to allow the FDIC to thoroughly evaluate the safety and soundness of applications from banks seeking to enter the stablecoin market. 

According to a summary from FDIC staff, banks wishing to issue payment stablecoins will need to submit detailed applications outlining various aspects of their proposed activities.

Each application must include a description of the intended payment stablecoin, along with a comprehensive overview of the subsidiary’s activities. 

Additionally, institutions must provide financial information, details regarding the ownership and control structure of the subsidiary, and pertinent policies related to customer agreements, including provisions for custody. Applicants will need to submit an engagement letter from a registered public accounting firm.

30-Day Review Period For Stablecoin Applications

The FDIC aims to promptly review submissions, notifying stablecoin applicants within 30 days whether their application has been deemed substantially complete. Following that, the agency must make a decision on approval within 120 days from the time the application reaches this status.

“This proposed rule is the FDIC’s first action to implement the GENIUS Act,” stated Acting Chairman Travis Hill. He added that in the coming months, the agency plans to introduce proposals to establish the required management standards for subsidiaries of FDIC-supervised institutions that are approved to issue payment stablecoins. 

The FDIC is also committed to providing comprehensive regulatory clarity regarding activities associated with digital assets and tokenized deposits. The plan will undergo a public consultation period before it can be finalized.

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