FDIC to Propose Stablecoin Application Rules This Month Under GENIUS Act

The Federal Deposit Insurance Corporation (FDIC) is set to drop its proposed framework for stablecoin applications this month. The move comes under the GENIUS Act, signaling a pivotal shift in how regulators approach the digital dollar ecosystem.

Regulators Finally Get a Playbook

For years, stablecoin issuers operated in a gray zone—too big to ignore, yet without clear rules. The GENIUS Act changes that. It hands the FDIC explicit authority to vet and approve applications, aiming to bring order to a market that ballooned past $150 billion while regulators were still debating definitions.

What's in the Proposal?

Expect strict capital and liquidity requirements. The FDIC will likely demand that issuers back their tokens with high-quality, liquid assets—think Treasury bills, not commercial paper or corporate debt. Full reserve transparency and regular attestations will be non-negotiable. The goal? Prevent another Terra/Luna collapse, but with the full faith and credit of the U.S. government looming in the background.

The Banking Industry's Mixed Blessing

For traditional banks, this is a double-edged sword. Clear rules open the door to launching their own stablecoins or partnering with fintechs. But it also legitimizes non-bank competitors who can now operate with a federal stamp of approval—potentially bypassing the traditional banking charter altogether. One cynical take? It's the financial industry's version of 'if you can't beat 'em, regulate 'em into a model you can profit from.'

A New Era for Digital Dollars

This isn't just about rule-making; it's about shaping the future of money. A regulated, FDIC-supervised stablecoin could become the dominant vehicle for digital payments, smart contracts, and decentralized finance. It pulls crypto-native innovation into the mainstream fold while giving regulators a leash. The proposal will spark fierce debate—from crypto purists who decry centralization to legacy banks fearing disruption. But one thing is clear: the era of wild west stablecoins is closing. The sheriff just laid down the law.

TLDR

• FDIC Acting Chair Travis Hill will testify that the agency expects to propose its stablecoin application framework before December ends
• A second proposed rule covering prudential requirements for FDIC-supervised stablecoin issuers is planned for early 2026
• The GENIUS Act, signed by President Trump in July, created oversight and licensing regimes across multiple federal regulators
• The FDIC is also developing guidance on tokenized deposits following recommendations from the President’s Working Group on Digital Asset Markets
• Federal Reserve Vice Chair Michelle Bowman confirmed the central bank is working with other banking regulators on capital, liquidity, and diversification regulations for stablecoin issuers

The US Federal Deposit Insurance Corporation will propose its framework for stablecoin applications before December ends. FDIC Acting Chair Travis Hill plans to deliver this announcement Tuesday during testimony to the House Financial Services Committee.

The agency has begun work on rules to implement the GENIUS Act. The first proposal will establish the application framework for stablecoin issuers seeking federal oversight. A second proposed rule covering prudential requirements for FDIC-supervised payment stablecoin issuers will follow in early 2026.

President Donald TRUMP signed the GENIUS Act into law in July. The legislation created oversight and licensing regimes across multiple federal regulators. Under the law, the FDIC will oversee stablecoin-issuing subsidiaries of banks it already supervises.

The FDIC insures deposits at thousands of US banks. Under the GENIUS Act, the agency must establish capital requirements, liquidity standards, and reserve asset diversification standards for stablecoin issuers.

Federal agencies must publish proposed rules for public feedback. The public comment period typically lasts several months. After reviewing input, regulators publish final versions of the rules.

The Treasury Department has also begun implementing the GENIUS Act. The agency started its implementation process in August. The Treasury completed a second public comment period on its proposal last month.

Additional Regulatory Developments

Hill confirmed the FDIC is developing guidance on tokenized deposits. This work follows recommendations from the President’s Working Group on Digital Asset Markets published in July. The report suggested clarifying or expanding permissible activities for banks, including asset and liability tokenization.

Federal Reserve Vice Chair for Supervision Michelle Bowman will also testify Tuesday. She stated the central bank is working with other banking regulators on stablecoin regulations. The Fed’s work includes developing capital, liquidity, and diversification requirements as mandated by the GENIUS Act.

Bowman said regulators need to provide clarity on digital asset treatment. This includes clarifying which activities banks can pursue. It also requires willingness to provide regulatory feedback on new use cases.

The House Financial Services Committee hearing will include other federal regulators. The Office of the Comptroller of the Currency and the National Credit Union Administration will present testimony. Both agencies have roles in implementing stablecoin regulations under the GENIUS Act.

The GENIUS Act divides regulatory responsibilities among federal and state entities. The Treasury will regulate some stablecoin issuers, including non-bank entities. The FDIC’s jurisdiction covers stablecoin-issuing subsidiaries of banks under its supervision.