The Federal Reserve is moving to formalize how payment stablecoin issuers are regulated, requesting public comments on proposals that would set reserve-asset limits and standardized capital requirements under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The central bank confirmed the step on Thursday, emphasizing that payment stablecoin issuers would be required to fully back their tokens with short-term Treasury bills or other highly liquid assets.
The proposals also include standardized capital requirements and risk-management standards, along with a dedicated application process for board-supervised banks seeking to issue payment stablecoins. The move is part of the Federal Reserve's broader effort to implement the GENIUS Act, which was signed into law by former President Donald Trump last year and is scheduled to take effect in January 2027. The law creates a federal regulatory framework requiring stablecoins to be fully backed by U.S. dollars or similarly liquid assets and to undergo mandatory annual audits.
Although an initial rulemaking deadline was set for July, agencies have taken longer to put the new framework in place. Federal Reserve Governor Michael Barr said he supported the latest proposal, but repeated concerns about anti-money laundering oversight. Barr said he wants a standard that would prevent the Board from taking supervisory or enforcement action on AML deficiencies unless the issue is deemed "significant or systemic." He cautioned that such a standard may have unknown effects on the Board's ability to ensure institutions maintain compliant programs.
The Fed's request for public comments signals an active engagement with issuers, banks, and other stakeholders. If finalized, the rules could bring more structure and transparency to the stablecoin market, while increasing compliance burdens for issuers. Traders and stablecoin users will be watching the feedback period and any subsequent announcements closely, because the final framework could shape how dollar-pegged tokens operate within the U.S. financial system.
