FDIC Proposes GENIUS Act Framework for Payment Stablecoin Issuers

April 13, 2026

FDIC proposes GENIUS Act rule establishing framework for FDIC-supervised payment stablecoin issuers

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On April 7, the FDIC announced a proposed rule implementing certain requirements and standards promulgated by the GENIUS Act (covered by InfoBytes here). The rule would establish a prudential framework for FDIC-supervised permitted payment stablecoin issuers (PPSIs), including requirements related to reserve assets, redemption, capital, liquidity, and risk management. The proposed rule would also establish requirements for FDIC-supervised institutions that provide payment stablecoin-related custodial and safekeeping services.

Among other things, the proposed rule would:

1. Limit PPSIs to issuing, redeeming, and managing reserves related to payment stablecoins and providing limited custodial and safekeeping services
2. Require PPSIs to maintain reserves fully backing outstanding payment stablecoins on at least a one-to-one basis with eligible highly liquid assets (as defined in the NPRM), with no more than 40 percent held with a single financial institution, and prohibit PPSIs from pledging, rehypothecating or reusing such assets, with narrow exceptions
3. Require PPSIs to maintain a minimum of $5 million in capital during the first three years, along with an operational backstop equal to 12 months of total expenses held in liquid assets separate from reserves
4. Prohibit PPSIs from paying interest or yield to stablecoin holders for the holding, use or retention of payment stablecoins

5. Prohibit PPSIs from extending credit to customers to purchase payment stablecoins
   Additionally, the proposed rule would:

6. Require custodians providing stablecoin-related safekeeping services to separately account for and segregate customer assets from their own

7. Clarify that deposits held as reserves backing payment stablecoins are insured as corporate deposits of the issuer, not on a pass-through basis to stablecoin holders — which FDIC Chairman Hill previewed in March 11 remarks (covered here) — and that tokenized deposits meeting the statutory definition of “deposit” under the FDI Act are treated no differently than other deposits for federal deposit insurance purposes

8. Propose amendments to the FDIC’s bank capital rule to ensure that an IDI with a consolidated PPSI subsidiary is not required to hold regulatory capital with respect to that subsidiary in excess of the capital the PPSI subsidiary must maintain under the GENIUS Act
   The FDIC noted it aimed to align the proposal with the OCC’s March 2 proposed rule (covered by this Orrick Insight here), and requested comment on the extent to which the primary federal payment stablecoin regulators should further align in their final rules. The proposal is the FDIC’s second rulemaking under the GENIUS Act, the first of which InfoBytes covered here. Comments on the proposed rule must be submitted by June 9.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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