The Federal Reserve Board has requested public comment on two proposals aimed at establishing a regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act. The proposals were released on Thursday.
The first proposal would require that Board-supervised payment stablecoin issuers fully back their stablecoins with permissible reserve assets, such as short-term Treasury bills and certain other high-quality, liquid assets. The proposal also establishes standardized capital requirements to address credit and operational risks, along with risk management standards. Additionally, it introduces rules for firms that safekeep the assets backing payment stablecoins and clarifies the permissibility of stablecoin and related activities for Board-supervised banks.
The second proposal establishes a tailored application process for Board-supervised banks seeking approval to issue payment stablecoins. Applicants would be required to submit a business plan and financial information. The proposal also outlines a process governing appeals, hearings, and final determinations for these applications.
The comment period is set to close 60 days after publication in the Federal Register.
