The Federal Reserve has proposed a new regulatory framework for payment stablecoins under the GENIUS Act, opening two proposals for public comment that would set reserve, capital, risk-management and bank-issuance standards.
Under the first proposal, Federal Reserve-supervised payment stablecoin issuers would have to fully back their tokens with permitted reserve assets. The Fed specifically cited short-term Treasury bills and other high-quality liquid assets as examples of eligible reserves.
The proposal would also establish standardized capital requirements designed to address credit and operational risks. It would add risk-management standards and rules for supervised firms that safeguard assets backing payment stablecoins.
A second proposal would create a tailored application process for Federal Reserve-supervised banks seeking to issue their own payment stablecoins. Reuters reported that the framework would also clarify the types of stablecoin activities supervised banks may conduct.
Decrypt separately reported that the proposals implement the federal framework created by the GENIUS Act and that the comment period will run for 60 days after publication in the Federal Register. The rules are relevant to the broader crypto market because stablecoins are core infrastructure for trading, settlement and liquidity across digital-asset markets, including BTC/USD and ETH/USD.