WASHINGTON — The Federal Reserve Board proposed two rules Sept. 24 governing how banks under its supervision issue payment stablecoins under the GENIUS Act, which President Trump signed into law in July 2025.
The first rule mandates that Fed-supervised issuers hold one dollar of permissible reserve assets for every dollar of stablecoin outstanding, with no fractional backing allowed. Reserves must consist of short-term Treasury bills and other high-quality liquid instruments.
Capital requirements follow a sliding scale: 2 percent on the first $20 billion in outstanding stablecoins, declining to 1 percent for amounts exceeding $50 billion.
Issuers that fail to maintain minimum capital requirements through the end of the following quarter trigger a mandatory liquidation of reserves and redemption of stablecoins.
The rules require stablecoin redemptions be processed within two business days—a significant lag from instant blockchain settlement.
The second proposal outlines the application process for banks seeking Fed-supervised stablecoin issuance, including business plan submission, financial disclosures, and an appeals process for denied applications.
The public comment period for both proposed rules runs through late November.
