September 24, 2026
For release at 2:30 p.m. EDT
WASHINGTON — The Federal Reserve Board took a significant step on Thursday toward integrating digital assets into the traditional financial system by requesting public comment on two major proposals. These regulatory frameworks are designed to govern Board-supervised payment stablecoin issuers pursuant to the mandates set forth in the GENIUS Act.
The initiative marks a pivotal development in how federal regulators approach the rapidly evolving digital currency landscape, aiming to establish clear boundaries, stringent safety measures, and transparent operational guidelines for financial institutions and specialized entities engaging in payment stablecoin activities.
Under the statutory framework of the GENIUS Act, the central bank is tasked with ensuring that payment stablecoins—digital tokens pegged to fiat currency, typically the U.S. dollar, and designed to maintain a stable value—operate with the same degree of safety and soundness expected of traditional financial instruments. The two newly released proposals represent the operational blueprint for achieving this legislative mandate.
The first proposal focuses heavily on risk mitigation, reserve backing, and operational resilience. According to the Board’s outline, this regulatory measure would require all Board-supervised payment stablecoin issuers to fully back their circulating stablecoins with specific permissible reserve assets. These assets would be restricted to highly secure, highly liquid instruments, most notably short-term Treasury bills and other comparable high-quality, liquid assets capable of ensuring that issuers can meet redemption demands under virtually any market conditions.
In addition to mandating full reserve backing, the proposal establishes standardized capital requirements. These requirements are specifically crafted to address the unique credit and operational risks associated with payment stablecoin activities. As the digital asset ecosystem interacts more frequently with traditional banking infrastructure, the Federal Reserve aims to prevent systemic vulnerabilities by ensuring that issuers maintain adequate capital cushions. The proposal also incorporates comprehensive risk management standards, aligning with the broader statutory requirements outlined in the legislation.
A critical component of this first proposal addresses the custody of these vital assets. The measure introduces explicit rules for Board-supervised firms that act as custodians, safekeeping the assets that back payment stablecoins. By regulating the custody layer, the Federal Reserve seeks to eliminate counterparty risks and ensure that reserve assets are legally protected and structurally segregated from the general operational funds of the custodian institutions.
Furthermore, the proposal provides much-needed regulatory clarity by explicitly defining the permissibility of stablecoins and related digital asset activities for Board-supervised banks. For years, commercial banking institutions have navigated a complex patchwork of guidance regarding what digital asset services they could legally offer. This proposal aims to establish a clear legal baseline, detailing how state member banks and other supervised banking organizations can participate in the stablecoin market while maintaining safety and soundness standards.
The second proposal shifts its focus to market entry, establishing a tailored and rigorous application process specifically designed for Board-supervised banks wishing to issue payment stablecoins. Under this framework, financial institutions seeking to enter the stablecoin issuance space would not navigate a generic banking application; instead, they would face a specialized evaluation process tailored to the digital asset sector.
Applicants under this second proposal would be required to submit comprehensive documentation, including a detailed business plan outlining their operational strategy, technological infrastructure, risk mitigation protocols, and thorough financial information demonstrating their capacity to support stablecoin issuance. This gatekeeping mechanism is designed to ensure that only institutions with robust technological capabilities and sound financial foundations are permitted to issue payment stablecoins to the public.
To ensure fairness, transparency, and due process, the second proposal also outlines a formal administrative process governing appeals, hearings, and final determinations for these applications. If an application faces regulatory hurdles or a denial, the structured process provides a clear path for institutional recourse, establishing formal milestones for administrative review and final decision-making by the Board.
The release of these two proposals initiates a standard administrative review and public feedback period. The public comment period will close exactly 60 days following the official publication of the proposals in the Federal Register. During this window, industry participants, financial institutions, technology companies, consumer advocacy groups, and other interested stakeholders will have the opportunity to submit formal feedback, data, and recommendations to the Federal Reserve Board.
The feedback gathered during this 60-day window is expected to play a critical role in shaping the final rules, providing the Board with practical insights from market participants who are actively navigating the intersection of traditional banking and digital currency innovation.
For media inquiries regarding the proposals, individuals may contact the Federal Reserve Board by email at [email protected] or by telephone at (202) 452-2955.
Last Update: September 29, 2026
