Fed Intensifies Stablecoin Scrutiny Following GENIUS Act Passage

Federal Reserve officials dedicated substantial discussion to stablecoins during their July 29-30 FOMC meeting, according to minutes released on August 20. The deliberations followed closely on the heels of President TRUMP signing the GENIUS Act, which establishes the first comprehensive federal framework for stablecoin regulation.

Payment stablecoins emerged as a focal point, with policymakers citing the new legislation as a potential catalyst for increased adoption. The Fed categorized these digital assets alongside private liquidity funds and offshore money market funds as rapidly growing but less transparent alternatives to traditional investment vehicles.

The discussions reflect Chair Jerome Powell's consistent calls for stablecoin regulation throughout 2024. Powell has previously acknowledged stablecoins' potential for mainstream appeal while maintaining a distinct stance toward Bitcoin, which he views as digital Gold rather than a dollar competitor.