Fed Proposes Reserve and Capital Rules for Stablecoin Issuers
The Federal Reserve released two proposed rulemaking documents under the GENIUS Act framework, establishing reserve requirements for payment stablecoins and approval procedures for banks seeking to issue them. A 60-day public comment period is now open in the Federal Register before the rules move toward finalization.
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Story Updates
- Updated Sep 26, 2026, 04:04 AM: Public comment period confirmed to be live in the Federal Register with 60-day window.
- Updated Sep 25, 2026, 10:01 PM: Federal Reserve opened 60-day public comment period on proposed stablecoin rules; full reserve backing requirement clarified.
- Updated Sep 25, 2026, 03:04 PM: Covered issuers must redeem tokens within two business days; bank applications follow 120-day decision timeline.
- Updated Sep 24, 2026, 10:13 PM: Federal Reserve opened two proposals for public comment under the GENIUS Act framework.
Proposed Reserve and Capital Requirements
The Federal Reserve released two separate proposed rules implementing the GENIUS Act framework, addressing the assets required to back payment stablecoins and the capital standards for supervised issuers. Under the first proposal, board-supervised payment stablecoin issuers must fully back outstanding tokens with permitted reserve assets, which the Fed identifies as short-term Treasury bills and other high-quality liquid assets. The rules also specify standardized capital requirements aimed at covering credit and operational risks, alongside broader risk-management standards and rules for firms safeguarding stablecoin reserve assets.
Redemption Timeline and Approval Process
Covered stablecoin issuers would generally be required to redeem tokens within two business days under the proposal, establishing a speed floor for converting digital tokens back to fiat or reserve assets. The second rule outlines the application and approval process for banks seeking to issue stablecoins through subsidiaries, creating a structured pathway for depository institutions and their affiliates to enter stablecoin issuance. Applications would follow the GENIUS Act's 120-day decision clock, moving away from the current environment where most stablecoin issuers operate outside the banking system or in regulatory gray zones.
Public Comment Period Now Open
The proposals entered the Federal Register with a 60-day public comment window, during which industry participants including stablecoin issuers and banking interests are expected to submit feedback. The timing of final rules remains unclear, though the Fed signaled these represent an early implementation step under the GENIUS Act's authority to regulate stablecoins issued by insured depository institutions and their subsidiaries.
Why It Matters
For Traders
Two-day redemption windows and full reserve backing reduce counterparty risk but may increase operational costs for issuers, potentially affecting stablecoin spreads.
For Investors
Explicit reserve backing requirements and expedited approval timelines signal the Fed is formalizing supervised framework; systemic risk for the sector declines as rules move toward finalization.
For Builders
Two-day redemption SLAs and full reserve backing standards clarify operational constraints; protocols integrating bank-issued stablecoins should design for guaranteed settlement windows and high-quality asset support.
This article is for information only and is not financial advice. Read the full disclaimer.
