FDIC Greenlights Bank-Issued Stablecoins: The GENIUS Act Application Process Is Now Live

The gatekeepers just handed out the keys. U.S. banks can now officially apply to become stablecoin issuers, following the FDIC's approval of the framework under the GENIUS Act. This isn't just regulatory chatter—it's the blueprint for bringing trillion-dollar digital cash onto balance sheets.

The New Playbook for Bank-Issued Digital Dollars

Forget speculative crypto wild west. This creates a formal channel for federally supervised institutions to mint their own digital currencies pegged to the dollar. The GENIUS Act's application process lays out the rules of the road: capital requirements, redemption policies, and reserve auditing. It transforms stablecoins from a fintech novelty into a core banking product.

Why This Cuts Through the Regulatory Fog

The move bypasses years of legislative gridlock by leveraging existing banking authorities. Instead of waiting for Congress to pass a bespoke crypto law, the FDIC is using its current powers to define the space. It provides immediate clarity in a sector choked by uncertainty, offering a sanctioned path forward that Wall Street can actually follow. Finally, a regulator doing its job—must have checked the wrong box on the bureaucratic bingo card.

The Bottom Line: Legitimacy with Strings Attached

This is the institutional on-ramp the market demanded, but it comes with the full weight of federal oversight. Expect adoption from major banks, a potential exodus from private stablecoin issuers, and a new era where your digital cash might come with a monthly maintenance fee. The old guard just co-opted the future of money—proving once again that in finance, the house always wins.

FDIC sets new application process under GENIUS Act

The rule addresses everything from the statutory factors the FDIC must use when reviewing applications to the time limits for responding.

Banks that plan to issue payment stablecoins must operate through subsidiaries, and those subsidiaries need to be approved before issuing a single token.

The FDIC ended its notice by saying that it is leaving the door open for public comments.

While the regulators sort out stablecoin rules, Wall Street is rolling out new crypto-linked products. Jefferies issued the first U.S. structured note tied to BlackRock’s Bitcoin ETF, and after that, banks like Goldman Sachs, Morgan Stanley, and JPMorgan joined in, pushing out more than $530 million in notes linked to the iShares Bitcoin Trust (IBIT), based on data from Structured Products Intelligence.

Jefferies built a note that doubles IBIT’s gain up to a 90% cap and softens the first 20% drop. If IBIT falls 50%, buyers take a 30% hit instead.

Banks launch crypto-linked structured notes

Marex Group Plc, expanding into the U.S., launched a note tied to two stocks, including miner TeraWulf, after Bitcoin’s drawdown pushed the token about 30% below its high. Marex plans to introduce more IBIT-linked notes.

“I’m convinced that the demand is there,” said Joost Burgerhout, who pointed to growing interest from bigger investors. “We’re seeing more and more institutional validation of bitcoin as an asset class.”

IBIT’s liquidity sits around $67 billion, making it easy for issuers to price these notes. Ether joins the action too, with Morgan Stanley and JPMorgan offering notes tied to the iShares ethereum Trust ETF (ETHA).

Not everyone wants in. Gary Garland, who uses structured notes but skips anything tied to crypto, said Bitcoin lacks fundamentals and that these notes “wrap it in complexity.” Gary added that Wall Street “is trying to weaponize Bitcoin’s volatility, using firecrackers and feathers,” calling the market “a horse race that doesn’t even have horses.”

Structured notes tied to Bitcoin sit inside a $200 billion market that mixes fixed income with derivatives. They attract wealthy clients who want risk shaped to specific portfolios.

Aaron Brachman, who advises on structured notes, said Wall Street will always chase new ways to make money off hot themes. “Anytime that there is money to be made on investments, there’s going to be someone creative on a Wall Street bank that’s going to find a way to make money off of it.”

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