The Federal Reserve published two proposed rules on Thursday for the stablecoin issuers it supervises under the GENIUS Act, opening a 60-day comment period that starts once they appear in the Federal Register. The first sets reserve, capital, risk management and custody standards. The second creates an application process for Fed-supervised banks that want to issue stablecoins through subsidiaries, requiring business plans, financial information and internal policies.
Under the first proposal, tokens must be fully backed at all times by permissible reserves such as short-term Treasury bills and other high-quality liquid assets, and issuers would hold standardised capital against credit and operational risk. On rewards, CoinDesk reports the Fed follows the approach already proposed by the Office of the Comptroller of the Currency: a presumption that most interest or yield payments are banned, with a narrow opening for certain arrangements involving third parties.
Governor Michael Barr backed the package but not all of it. He said stablecoins will only be stable if holders can redeem them at par, reliably and promptly, across a range of conditions, and asked for input on whether the rule deals adequately with interest rate and foreign currency risk. His sharper objection was to a provision requiring an anti-money laundering failing to be significant or systemic before the Fed acts, which he warned could have unknown effects on its ability to supervise.
Timing is the other asterisk. Regulators missed the law’s July deadline for these rules, and the Act takes effect no later than January 2027. Sixty days of comment, followed by review and a final vote, leaves little margin before banks that want to issue need to know what they are building to. Barr’s own statement concedes that further work will undoubtedly be required.
