Fed Proposes Rules for Stablecoin Issuers, Emphasizing Full Backing and Capital Requirements
The Federal Reserve is moving to establish foundational regulations for the stablecoin issuers it will oversee, proposing Thursday that these entities fully back their tokens with safe, liquid assets and maintain capital reserves to mitigate operational risks.
The central bank has opened two proposals for public comment as it develops the regulatory framework mandated by the GENIUS Act, the stablecoin legislation signed into law by President Donald Trump in July 2025.
The first proposal would require payment stablecoin issuers supervised by the Board to hold reserves exclusively in permissible assets, such as short-term Treasury bills and other high-quality, liquid holdings. It would also introduce standardized capital requirements to address credit and operational risks, establish risk-management standards, and outline rules for firms responsible for safekeeping the assets that back the tokens.
The second proposal would establish a tailored application process for banks supervised by the Board that wish to issue payment stablecoins. This process would necessitate the submission of a business plan and financial information, and would define procedures for appeals, hearings, and final decisions.
The public comment period for these proposals will conclude 60 days after their publication in the Federal Register.
Stablecoins are blockchain-based tokens designed to maintain a stable value by being pegged to a reference asset, most commonly the U.S. dollar. Issuers back these tokens with reserves, ensuring that each token can be redeemed at its face value. They have become an integral component of the cryptocurrency ecosystem, facilitating the movement of funds between exchanges, trade settlements, cross-border payments, and the parking of assets without the need to convert back to traditional currency.
This initiative represents the Federal Reserve’s contribution to a broader, multi-agency implementation of the GENIUS Act, which established the first federal framework for dollar-pegged tokens. The Office of the Comptroller of the Currency has been working to finalize its own stablecoin rules by November, ahead of a statutory deadline in January. Concurrently, the Treasury Department has proposed separate rules that would prohibit platforms from selling noncompliant stablecoins to U.S. customers.
The development of these regulations comes as stablecoins are increasingly integrated into the mainstream financial system. The Trump administration has been actively promoting dollar-pegged tokens as a means to reinforce the dollar’s global dominance.
The emphasis on full-reserve backing and bank-grade oversight is central to this strategy, aiming to ensure that stablecoins maintain their peg and are consistently redeemable at face value.
