FDIC Advances Stablecoin Rules Under GENIUS Act
- The FDIC is launching a 60-day public comment period for its first rule proposal under the GENIUS Act, which creates a pathway for banks to issue stablecoins through subsidiaries.
- The proposal establishes a “tailored” application process with a 120-day review window and an appeals system to minimise regulatory burden for supervised institutions.
- Acting Chairman Travis Hill confirmed that additional rules regarding capital, liquidity, and risk management standards for stablecoin issuers will be released in the coming months.
The US Federal Deposit Insurance Corp. has issued its first rule proposal under the new stablecoin law, setting out how FDIC-supervised banks would apply to issue stablecoins through subsidiaries.
The FDIC board voted Tuesday to open a 60-day public comment period before moving toward a final rule.
The proposal focuses on process rather than prudential standards. It would define how applications are submitted and reviewed, require the agency to act within a 120-day approval window, and create an appeal pathway for rejected applicants.
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New Rules And Goals
Acting Chairman Travis Hill, President Donald Trump’s nominee to lead the agency permanently, said the goal is to assess safety and soundness against the law’s requirements while reducing unnecessary compliance burden.
Under the proposal, the FDIC would adopt a tailored application process that would enable the FDIC to evaluate the safety and soundness of an applicant’s proposed activities based on the statutory factors while minimizing the regulatory burden on applicants. This proposed rule is the FDIC’s first action to implement the GENIUS Act.
Travis Hill, FDIC Acting Chairman.
The framework flows from the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which assigns regulators to different stablecoin issuers and designates the FDIC as the lead regulator for insured depository institutions.
Hill said a separate, more substantive rule is planned in the coming months to set capital, liquidity, and risk management expectations for bank-linked stablecoin issuance.
Under the proposed application system, banks would submit letters explaining their business, financial condition, and operational plans for running a stablecoin program in a safe and consistent way.
Read more: Brazil’s Biggest Bank Goes Orange-Pill: Itaú Partner Urges Bitcoin Allocation
The post FDIC Advances Stablecoin Rules Under GENIUS Act appeared first on Crypto News Australia.
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