Fed unveils stablecoin framework under GENIUS Act

On Sep. 24, the Federal Reserve sought public comments on two proposals related to establishing a regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act.

The move marks a major step toward implementing the U.S. stablecoin law.

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There are two proposals.

One requires that Board-supervised payment stablecoin issuers fully back their stablecoins with certain permissible reserve assets, such as short-term U.S. Treasury bills and other high-quality, liquid assets. It also imposes capital and risk-management standards.

Another establish a tailored application process for Board-supervised banks seeking to issue stablecoins through subsidiaries.

The Fed opened the proposals to public comments for 60 days after publication in the Federal Register.

The first framework for the GENIUS Act arrives

The GENIUS Act was signed into law on July 18, 2025, creating the first federal regulatory framework specifically for payment stablecoins in the U.S. The law generally limits issuance to approved entities and requires stablecoins to be backed at least 1:1 by qualifying reserves.

Eligible reserves include cash, Federal Reserve balances, insured deposits and Treasurys with 93 days or less remaining to maturity. 

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Thursday’s proposals begin translating those statutory requirements into operating rules for institutions supervised by the Fed. Under the framework, reserve assets would have to equal or exceed the value of outstanding stablecoins at all times and be segregated from other issuer assets.

The rules would also cover firms safeguarding stablecoin reserves and clarify which related activities are permissible for Fed-supervised banks. 

A separate proposal would require banks seeking to issue stablecoins to submit information including a business plan, financial information and details about their proposed capital structure.

The stablecoin framework is moving ahead while Washington’s broader crypto legislation remains unresolved. The Senate failed to advance the CLARITY Act on Sept. 15 in a 49-50 procedural vote. The bill is intended to establish a broader market structure for digital assets and clarify oversight roles across federal regulators.

That leaves stablecoins on a separate regulatory track, with the GENIUS Act already enacted and regulators now moving toward final implementation rules while broader crypto market structure remains unsettled.

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