U.S. FDIC proposes first stablecoin regulation under the GENIUS Act

The U.S. Federal Deposit Insurance Corporation (FDIC) has put forward the first stablecoin-related rule proposal under the GENIUS Act, a bill to regulate stablecoins. The core of the proposal is to establish an application procedure that would allow depository institutions supervised by the FDIC to form stablecoin-issuing subsidiaries.

On the 16th (local time), crypto-focused media CoinDesk reported that the FDIC announced an official stablecoin rule proposal under the GENIUS Act framework. This proposal focuses on setting out the procedures by which banks and others supervised by the FDIC would establish stablecoin-issuing subsidiaries.

If finalized, depository institutions supervised by the FDIC would be able to pursue the formation of stablecoin-issuing subsidiaries following the specified application procedure. The proposal is described as largely outlining the approval flow and submission requirements during the subsidiary formation process.

Travis Hill, Acting FDIC Chairman, said, "Following these application procedure rules, more substantive rules setting capital, liquidity, and risk-management requirements for stablecoin-issuing subsidiaries will be released within a few months."

The market views this proposal as an initial step toward handling bank-issued stablecoins within the regulatory framework. If capital, liquidity, and risk-management standards are later clarified, the structure for bank-subsidiary-issued stablecoins is likely to be formally organized.