The FDIC announced a proposal to allow banks to oversee the issuance of payment stablecoins, implementing the GENIUS Act when the total global value of stablecoins exceeds $300 billion.
The U.S. Federal Deposit Insurance Corporation (FDIC ) is accelerating the rule-making process under the GENIUS Act by proposing a framework to guide regulated banks in filing applications to issue stablecoins for payment purposes. This is a key step in moving from the legislative to the enforcement phase of the landmark stablecoin provisions of this act.
In a 38-page document posted on its official website, the FDIC details the expected approval requirements for issuing payment stablecoins by subsidiaries of institutions under its supervision. According to Bloomberg, the proposal will undergo a public consultation phase before moving to the next step of the formal rulemaking process.
Under the proposed framework, banks would apply to issue payment stablecoins through subsidiaries, with the FDIC evaluating both the subsidiary and the parent company based on criteria set out in the GENIUS Act.
These criteria include the ability to meet stablecoin issuance standards, financial health, governance quality, redemption policies, and factors related to the safety and soundness of the system. Once approved, the FDIC will Vai as the key federal regulator overseeing the subsidiary's payment-based stablecoin operations.
A transformation in the financial supervision system.
The FDIC, the agency responsible for insuring bank deposits and supervising member institutions, has become more proactive in shaping how banks engage with digital assets in recent years. This includes XEM the use of the concept of “reputation risk” in banking supervision, which could impact how financial institutions interact with the crypto asset business, as Cointelegraph reported in October.
The GENIUS Act – short for Guiding and Establishing National Innovation for US Stablecoins – was passed by the Senate in June and signed into law by President Donald Trump the following month. The act establishes a comprehensive regulatory framework for payment stablecoins, requiring issuers to maintain a one-to-one reserve of USD or other approved high-quality liquidation assets.
The act received widespread acclaim from the cryptocurrency industry, with senior leaders from Coinbase, Circle, Robinhood, and Gemini attending the signing ceremony. Many industry participants XEM the act as a tool to bolster the liquidation of the USD and expand its global reach through stablecoins, a view Chia by Treasury Secretary Scott Bessent.
The total value of stablecoins in circulation globally has exceeded $300 billion, driven almost entirely by Token Peg to the US dollar.
