New U.S. FDIC rules! Stablecoin reserves face strict requirements and are not covered by the $250k per-person deposit insurance benefit

The FDIC rolls out a stablecoin regulatory framework to implement the GENIUS Act, requiring 1:1 reserves and 2-day redemptions, clarifying that deposit insurance does not apply.

A federal regulatory framework is taking shape, with the FDIC advancing the GENIUS Act’s details

The Federal Deposit Insurance Corporation (FDIC) approved a new rule proposal on yesterday (4/7), setting forth the first comprehensive prudential regulatory framework for the conduct of issuing and managing stablecoins by banks it regulates and their affiliated entities. This initiative is intended to carry out the GENIUS Act, which was signed into law last year by the Trump administration, marking a key step by the U.S. federal government in regulating dollar-pegged digital assets.

Under the proposal, the FDIC will define “Permitted Payment Stablecoin Issuers” (PPSIs). These entities are expected to operate as subsidiaries of FDIC-regulated institutions and must comply with stringent capital, reserve, and risk-management standards.

FDIC Vice Chair Travis Hill said in a board meeting that as stablecoins continue to expand their use in payment infrastructure, this framework is designed to address potential operational risks and maintain stability in the financial system. The new rule is the second major regulatory action after last December, when the FDIC introduced procedures for banks to apply to issue stablecoins through affiliated entities.

At the same time, the U.S. Office of the Comptroller of the Currency (OCC) also released a corresponding regulatory framework for the institutions under its jurisdiction in February this year, showing that U.S. federal financial regulators are working to establish a unified stablecoin regulatory regime.

Strict 1:1 reserve and liquidity requirements to ensure two-day redemption execution

In terms of reserve asset management, the FDIC’s proposal requires stablecoin issuers to maintain a full 1:1 reserve ratio, and these reserves must be strictly separated from other business activities of the issuer. Eligible reserve assets are limited to highly liquid, low-risk instruments, including: U.S. currency; balances held at Federal Reserve Banks; deposits at insured banks; short-term U.S. Treasury bills; and specific overnight repurchase agreements. The issuer must monitor reserve assets daily and undergo periodic audits. In addition, the proposal also sets concentration limits on reserve holdings to reduce exposure risk to a single counterparty, ensuring sufficient redemption capacity even during periods of market stress.

For the redemption mechanism investors care about most, the rule establishes clear service standards. The issuer must publish a clear redemption policy and process redemption requests within 2 business days. To guard against runs risk, the FDIC requires that if the amount redeemed on a given day exceeds 10% of the total outstanding supply, the issuer must immediately notify regulators and may, depending on circumstances, apply to extend the redemption deadline. This mechanism is intended to provide market transparency while giving regulators early warning to prevent liquidity problems of individual stablecoins from evolving into systemic financial risk.

Capital buffers and operating thresholds, strictly drawing lines around interest-earning boundaries

In addition to reserve asset requirements, the FDIC also imposes strict capital and operational requirements on issuers. For the first 3 years of operations, new payment stablecoin issuers must maintain at least $5 million in initial capital, and thereafter the capital composition should be primarily Common Equity Tier 1 capital. In addition to statutory capital requirements, issuers must also hold a separate liquidity buffer equal to 12 months of operating expenses, which is clearly defined as operating reserves distinct from stablecoin reserve funds. Further, for large issuers with market capitalization exceeding $50 billion, the FDIC will require higher-frequency annual reviews and dedicated compliance examinations.

Regarding product characteristics, the FDIC draws a hard line on the nature of stablecoin returns. The proposal explicitly restricts issuers from advertising that stablecoin holders can receive interest or profits, and even rewards offered via third-party arrangements must be subject to strict scrutiny. This rule reflects regulators’ position that stablecoins should be treated as payment tools rather than savings products. On operational resilience, issuers must establish robust cybersecurity systems covering private key management, blockchain monitoring, incident response, and an annual anti-money-laundering compliance certification, to ensure the security and compliance of digital assets at the technical level.

Clarifying the boundaries of deposit insurance, stablecoins do not receive pass-through coverage

One of the most important clarifications in this regulatory framework concerns how deposit insurance applies. The FDIC states explicitly that stablecoins issued under this framework itself do not receive the standard $250,000 per-person deposit insurance protection. This means that the reserve funds held by the issuer at a bank will be treated as the issuer’s corporate deposits, and token holders do not have individual insurance coverage. These anti-pass-through insurance provisions are intended to prevent the market from mistakenly believing that stablecoins carry the same federal backing as bank deposits, thereby maintaining the risk boundary between stablecoins and the traditional financial system.

However, the FDIC also provides different treatment for tokenized deposits. If traditional bank deposits are presented purely in a tokenized technical format and still meet the legal definition of bank deposits, they may continue to receive standard deposit insurance coverage. The proposal is currently in a 60-day public comment period. The FDIC is seeking public feedback on 144 specific issues, including capital calibration, eligible assets, and the interest prohibition.

• Related news: U.S. Treasury kicks off GENIUS Act implementation details, opening 60 days of public input on stablecoin regulation

As the mid-2026 implementation deadline set by the GENIUS Act approaches, federal regulators are accelerating the completion of these rules. At the same time, the U.S. Senate is also in final negotiations over the disputes in the CLARITY Act regarding stablecoin yield and incentives. The full statutory codification of stablecoins has become a core issue in U.S. crypto-finance policy for 2026.