The Federal Reserve on Thursday proposed two rules to bring payment stablecoin issuers under its supervisory framework, implementing mandates from the GENIUS Act that President Donald Trump signed into law on July 18, 2025. The proposals, now open for public comment, would set reserve, capital, and risk-management standards for firms the Fed oversees.
What the first proposal requires
The first rule would require Fed-supervised payment stablecoin issuers to fully back their tokens with approved reserve assets — short-term US Treasury bills and other high-quality liquid assets. It also sets capital requirements for credit and operational risks, adds risk management standards for stablecoin activities, and clarifies which stablecoin activities are permitted for banks under the Fed's watch.
The proposal extends to firms that hold assets backing stablecoins, not just the issuers themselves. That means custodians and other entities in the reserve chain would face their own compliance obligations.
Barr's condition for stability
Fed Governor Michael Barr said stablecoins can only remain stable if users can quickly redeem them at full value, even during market stress or when the issuer and related companies face financial strain. He expressed support for the proposed rulemaking, pointing to provisions that limit reserve assets and set transparent, standardized capital requirements. Barr also called for public input on interest rate and foreign currency risks.
Applications and appeals under the second proposal
The second proposal focuses on the application process for supervised banks seeking to issue payment stablecoins. It would require business plans, financial information, and other documents, and lays out procedures for appeals and hearings. That rule is aimed at banks already under the Fed's umbrella that want to enter the stablecoin market.
Other agencies move in parallel
The Fed's action is part of a broader regulatory push. The Treasury Department has proposed major federal definitions covering who can issue US stablecoins and which entities must comply with the law. The Federal Deposit Insurance Corp began its own regulatory process in December. And in June, several agencies proposed requiring stablecoin issuers to verify and identify users in line with existing financial regulations.
Congress moved the GENIUS Act through in 2025 to establish federal rules for stablecoins, and Trump's signature made it the law of the land. Now the individual agencies are filling in the details.
What happens next
The public comment period will close 60 days after the proposals are published in the Federal Register. After that, the Fed will review feedback and decide whether to finalize the rules, revise them, or reopen the comment period. For stablecoin issuers and banks weighing a move into the market, the clock is now ticking on when they'll know the full scope of their obligations.
