The Federal Reserve Board on Thursday requested public comment on two proposals establishing a regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act.
The first proposal would require Board-supervised payment stablecoin issuers to fully back their stablecoins with permissible reserve assets, such as short-term Treasury bills and other high-quality, liquid assets. It would also set standardized capital requirements to address credit and operational risks tied to payment stablecoin activities, along with risk management standards required by law. Separately, the proposal introduces rules for Board-supervised firms that safekeep the assets backing payment stablecoins, and clarifies the permissibility of stablecoin and related activities for Board-supervised banks.
The second proposal would establish a tailored application process for Board-supervised banks seeking to issue payment stablecoins. Applicants would need to submit a business plan and financial information, among other documents. The proposal also sets out a process for appeals, hearings, and final determinations on applications.
