Federal Reserve Proposes New Rules for Stablecoin Issuers
- The Federal Reserve has introduced two proposed rulemaking packages targeting stablecoin issuers under the GENIUS Act.
- Issuers supervised by the Board must fully back tokens with permitted reserve assets, like short-term Treasury bills.
- Proposals include standardized capital and risk-management requirements to cover credit and operational risks.
- A dedicated application process for banks seeking to issue payment stablecoins is also part of the proposal.
- Governor Michael Barr supports the proposal’s direction, emphasizing clear redemption rights and strong safeguards.
The Federal Reserve’s proposals aim to create a comprehensive regulatory framework for stablecoin issuance, ensuring that all tokens are fully backed by high-quality liquid assets and that issuers meet strict capital requirements. These measures are designed to bolster confidence in stablecoins as reliable digital cash equivalents.
