FDIC Proposes Stablecoin Rules Under GENIUS Act, Excluding Deposit Insurance

The Federal Deposit Insurance Corporation (FDIC) approved a proposed rule on April 7, 2026 to implement key provisions of the GENIUS Act, establishing a prudential framework for stablecoin issuers under its supervision that includes requirements for reserve assets, redemptions, capital, and risk management.

The proposal explicitly excludes stablecoins from deposit insurance protections, mandates redemption within two business days, and prohibits issuers from claiming their tokens generate interest or yield, while allowing insured banks to hold reserves and provide custody services.

FDIC Rule Sets Reserve, Redemption, and Capital Standards for Stablecoin Issuers

The FDIC’s proposed rule applies to permitted payment stablecoin issuers, defined under the GENIUS Act as stablecoin issuers that are subsidiaries of insured depository institutions or authorized by federal or state regulators. The framework requires stablecoin issuers to hold safe assets such as cash or U.S. Treasuries as reserves and to prove they can redeem tokens reliably at a one-to-one value.

Issuers must redeem tokens within two business days. The proposal also prohibits issuers from representing that their tokens pay interest or yield, including through third-party arrangements. The rule clarifies that tokenized deposits meeting the statutory definition of “deposit” would receive identical treatment under the Federal Deposit Insurance Act as any other deposit type.

FDIC Chair Travis Hill noted that over the past two years, the agency has seen tremendous progress in stablecoin development, including enactment of the GENIUS Act and substantial technological development by both banks and nonbanks. He stated that development of stablecoin and tokenized deposit products continues to advance, and use cases continue to multiply.

Stablecoins Excluded from Deposit Insurance, Banks to Play Central Role

A key provision of the FDIC’s proposal explicitly excludes stablecoins from deposit insurance protections. Deposits held as reserves backing payment stablecoins would not be insured to token holders on a pass-through basis, confirming that stablecoins will not receive the same protections as traditional bank accounts. The proposal follows the GENIUS Act’s provision stating that payment stablecoins are not backed by the full faith and credit of the United States and are not subject to federal deposit insurance.

At the same time, the rule formally brings banks into the stablecoin ecosystem. Insured banks would be allowed to hold reserves and provide custody services, linking stablecoins more directly to traditional financial infrastructure. The FDIC seeks to clarify deposit insurance coverage of deposits that serve as reserve assets.

The rule is not final. The FDIC will accept public comments for 60 days after the proposal is published in the Federal Register. The agency is seeking feedback on 144 specific questions in its 191-page proposal.

Implementation of GENIUS Act Continues Across Regulators

The FDIC’s action follows other regulators’ efforts to implement the GENIUS Act, which was signed into law in July 2025. The law created a federal regulatory framework for stablecoins, requiring full backing by U.S. dollars or similarly liquid assets, mandating annual audits for issuers with market capitalization exceeding $50 billion, and establishing guidelines for foreign issuance.

The Office of the Comptroller of the Currency (OCC) issued its own framework in February 2026. On April 1, 2026, the Treasury Department issued a notice of proposed rulemaking to address state-level oversight of smaller stablecoin issuers, allowing those with less than $10 billion in outstanding tokens to choose state regulation if their state meets federal standards. The Treasury’s comment period runs through June 2, 2026.

The FDIC’s proposed rule would apply to permitted payment stablecoin issuers that are subsidiaries of insured depository institutions or authorized by federal or state regulators. The agency joins the OCC and Treasury in crafting a comprehensive regulatory regime for stablecoins under the GENIUS Act framework.

FAQ

What does the FDIC’s proposed stablecoin rule require?

The FDIC’s proposed rule establishes standards for stablecoin issuers including reserve asset requirements, redemption processes (within two business days), capital requirements, and risk management. It prohibits issuers from claiming their tokens pay interest or yield and explicitly excludes stablecoins from deposit insurance protections.

Do stablecoin holders receive FDIC deposit insurance?

No. The FDIC’s proposal explicitly excludes stablecoins from deposit insurance protections. Deposits held as reserves backing payment stablecoins would not be insured to token holders on a pass-through basis. The rule follows the GENIUS Act’s provision that payment stablecoins are not backed by the full faith and credit of the United States and are not subject to federal deposit insurance.

How can the public provide input on the FDIC’s proposal?

The FDIC will accept public comments for 60 days after the proposed rule is published in the Federal Register. The agency is seeking feedback on 144 specific questions in its 191-page proposal. The Treasury Department’s related comment period on state-level oversight runs through June 2, 2026.