Federal Reserve Proposes New Rules for Stablecoin Issuers Under GENIUS Act
The Federal Reserve has proposed new rules for stablecoin issuers, mandating full backing with safe assets and introducing a two-day redemption window. These rules are part of the implementation of the GENIUS Act, which aims to regulate stablecoins more strictly. The proposals are now open for public comment.
Key takeaways
- The Fed proposed full reserve backing and capital requirements for stablecoin issuers under the GENIUS Act.
- A two-day redemption window and regular reserve disclosures are required for issuers.
- Banks must apply for approval to issue stablecoins under the new rules.
- The proposals also restrict stablecoin yield programs, per CoinDesk.
- Public comments on the proposals are open until November 2026.
The Federal Reserve has unveiled two new proposals aimed at regulating stablecoin issuers under the GENIUS Act. The proposals require issuers supervised by the Fed to back their tokens fully with safe assets and create an application process for banks seeking to issue stablecoins. Additionally, the Fed has proposed a two-day redemption window and new reserve disclosures to ensure transparency and stability in the stablecoin market.
## What Are the Key Proposals? The Federal Reserve's proposals include several key measures: - Full Reserve Requirements: Stablecoin issuers must back their tokens fully with safe assets to ensure stability and reduce the risk of depegging. - Two-Day Redemption Window: This measure aims to provide a buffer period for issuers to manage redemptions and maintain liquidity. - New Reserve Disclosures: Issuers will be required to disclose their reserve holdings regularly to enhance transparency. - Capital Requirements: The Fed also set capital requirements for issuers, as reported by CoinTelegraph, adding a layer of financial cushion beyond the reserve mandate. - Yield Program Restrictions: The CoinDesk report notes the proposals include rules governing stablecoin yield programs, which could affect how issuers offer interest or rewards to holders.
## Why the Timing Matters The proposals come as part of the implementation of the GENIUS Act, which was passed last year to regulate stablecoins more strictly. The Act aims to address concerns about the stability and transparency of stablecoins, particularly in light of recent market volatility. The Fed's proposals are now open for public comment, with a deadline set for November 2026.
## What It Means for Stablecoin Issuers For stablecoin issuers, these proposals represent a significant shift towards greater regulation and transparency. Issuers will need to ensure they comply with the new reserve requirements, capital buffers, and redemption windows. Banks seeking to issue stablecoins will also need to go through a new application process, which could deter some potential entrants. Additionally, yield programs — a common feature used by issuers to attract users — may face new restrictions under the rules described by CoinDesk.
## What to Watch Next The public comment period is a critical phase in the implementation of these proposals. Stakeholders, including stablecoin issuers, banks, and consumers, are encouraged to provide feedback. The final rules are expected to be finalized by November 2026. For more on recent stablecoin regulations, see our coverage on the OCC's acceleration of GENIUS Act rules.
Frequently asked questions
What is the GENIUS Act?
The GENIUS Act is legislation passed in 2025 to regulate stablecoins, requiring issuers to maintain full reserves and meet federal oversight standards.
What are the key proposals in the Federal Reserve's new rules?
Key proposals include full reserve requirements, capital buffers, a two-day redemption window, new reserve disclosures, and restrictions on yield programs.
When is the public comment period for these proposals?
The public comment period is open until November 2026.
What does this mean for banks wanting to issue stablecoins?
Banks will need to go through a new application process to issue stablecoins under the proposed rules.