Aniket Pujari
US Federal Deposit Insurance Corporation Chairman Travis Hill has confirmed that his agency will propose a new application framework for stablecoin issuers later this month.
Summary
- The FDIC will propose a new application framework for stablecoins this month.
- Prudential rules covering capital and liquidity standards are expected early next year.
- FDIC is also preparing guidance on tokenized deposits and bank asset tokenization.
Through a written testimony to be delivered before the House Financial Services Committee on Dec. 2, Hill stated that the FDIC has begun work to promulgate rules to implement the GENIUS Act, and a formal proposal is expected later this month.
“We expect to issue a proposed rule to establish our application framework later this month and a proposed rule to implement the GENIUS Act’s prudential requirements for FDIC-supervised payment stablecoin issuers early next year,” Hill said.
The GENIUS Act, which is considered a landmark regulatory development, was signed into law by President Donald Trump earlier this year. It outlines how multiple federal and state agencies, including the FDIC, will oversee and license stablecoin issuers operating in the United States.
According to Hill, the FDIC will be responsible for licensing and supervising subsidiaries of insured depository institutions that issue payment stablecoins, adding that the GENIUS Act will require several rulemakings to be completed over the coming year.
The FDIC will also be tasked with outlining capital requirements, liquidity standards, and reserve asset diversification standards for stablecoin issuers, Hill added.
To guide this process, the FDIC is taking into account recommendations published in July by the President’s Working Group on Digital Asset Markets. The group had advised regulators to clarify or expand permissible activities in which banks may engage, including the tokenization of assets and liabilities.
“We are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenized deposits,” Hill said.
Federal Reserve is working on stablecoin rules
The House hearing on Tuesday will also include testimony from other financial regulatory authorities, including Federal Reserve Vice Chair for Supervision Michelle Bowman. Bowman noted that the central bank is currently working with other banking regulators to develop capital, liquidity, and diversification standards for stablecoin issuers as required under the GENIUS Act.
“We also need to provide clarity in treatment on digital assets to ensure that the banking system is well placed to support digital asset activities. I think this includes clarity on the permissibility of activities, but also a willingness to provide regulatory feedback on proposed new use cases,” Bowman said.
After the initial proposal is released, the FDIC will seek and review public comments before finalizing the rule, a process that typically takes several months. Other agencies, such as the Treasury Department, have already advanced their own rulemaking processes under the GENIUS Act, including public consultations that concluded in November.
