Stablecoin rules mandate one-to-one backing and capital buffers
The Federal Reserve Board has issued a proposed regulatory framework under the GENIUS Act governing payment stablecoin issuers. The proposal establishes strict reserve backing, capital requirements, and a 60-day public comment window.
Full reserves and graduated capital charges
Under the proposal, permitted payment stablecoin issuers must maintain reserve assets equal to or exceeding par value at all times.
Eligible reserves include cash, Federal Reserve balances, bank deposits, and Treasury bills with remaining maturities of 93 days or less.
Issuers face a two percent capital charge on uninsured deposit claims and undercollateralized reverse repurchase agreements.
Operational risk capital requirements are graduated based on volume: 2.0 percent on the first $20 billion in stablecoins, 1.5 percent on the next $30 billion, and 1.0 percent above $50 billion, plus 25 percent of average non-reserve revenue.
Issuers must complete redemptions within two business days.
Parent bank deductions and anti-tying curbs
The proposal implements statutory provisions from the GENIUS Act enacted in July 2025.
Parent banking organizations consolidating a stablecoin issuer must deconsolidate the entity and deduct its minimum capital requirement from common equity tier 1 capital.
The framework prohibits issuers from paying interest or yield solely for holding stablecoins and enforces nationwide anti-tying restrictions.
Uninsured state depository issuers with at least $10 billion in tokens transition to Board supervision.
Prudence over industry disruption
The rules treat stablecoins essentially as narrow banks through punitive capital charges on credit and operational risk.
This heavy buffering effectively eliminates run hazards while suffocating yield-driven business models.
Consequently, the regime steers the stablecoin market firmly into the hands of regulated banking groups.