The Federal Reserve on September 24 proposed two rules implementing the GENIUS Act for payment stablecoin issuers under its supervision. The package combines operating safeguards with an application process for banks seeking to issue the tokens. Neither proposal is a final rule.

Reserves, capital and custody

The first proposal would require supervised issuers to fully back their stablecoins with permissible reserve assets, including short-term Treasury bills and certain other high-quality, liquid assets. It would establish standardized capital requirements covering specified credit and operational risks, alongside risk-management standards.

The same proposal addresses Fed-supervised firms that safeguard stablecoin reserve assets and clarifies which stablecoin-related activities supervised banks may undertake. That makes the package relevant to custody providers as well as prospective issuers.

A separate approval process

The second proposal sets out a tailored application process for Fed-supervised banks. Applicants would submit a business plan, financial information and other documentation. It also establishes procedures for appeals, hearings and final application determinations.

Governor Michael Barr supported the rulemaking while identifying unresolved questions. His statement emphasized reliable redemption at par during market stress, sought feedback on interest-rate and foreign-currency risks, and called for clear universal redemption rights in the final rule.

For stablecoin infrastructure builders, the immediate development is a more detailed proposed framework for reserves, capital, custody and bank entry—not a completed authorization regime. The Fed says the public-comment period closes 60 days after publication in the Federal Register, rather than 60 days after the announcement. Final requirements remain subject to that rulemaking process.