FDIC advanced prudential rules for bank-issued stablecoins

The Federal Deposit Insurance Corporation’s Board of Directors approved a proposed prudential framework for certain payment-stablecoin issuers on April 7, 2026, advancing a central piece of the United States’ implementation of the GENIUS Act.

The proposal covered issuers supervised by the FDIC, including stablecoin-issuing subsidiaries of state-chartered nonmember banks and state savings associations. It addressed reserve assets, redemptions, capital, risk management and specified custody services. The three participating directors—Chairman Travis Hill, Jonathan Gould and Russell Vought—voted for the notice of proposed rulemaking.

The action mattered because it began translating the federal stablecoin statute into operating standards for institutions inside the FDIC’s jurisdiction. It was not a final rule, a stablecoin approval or a framework governing every U.S. or offshore issuer.

Reserves and redemptions

Under the proposal, an FDIC-supervised permitted payment-stablecoin issuer would have to maintain identifiable eligible reserves with a value at least equal to its outstanding stablecoins on a one-to-one basis. The proposed framework also included monthly reserve disclosures and independent audit requirements.

An issuer could hold reserves itself or use an eligible financial institution. The draft generally limited exposure to a single reserve custodian to 40% of total reserve assets. Falling below full backing would trigger notice to the FDIC and an explanation of corrective measures.

Issuers would also have to publish clear redemption policies. The proposal generally defined timely redemption as completion within two business days after receiving a holder’s request, subject to circumstances in which the FDIC could authorize more time.

These were proposed safeguards, not evidence that every stablecoin then circulating had equivalent reserves, redemption rights or regulatory supervision. The FDIC’s action applied to the institutions and activities falling within its statutory remit.

Capital, operations and custody

The proposal contemplated an initial minimum capital requirement of $5 million during an issuer’s de novo period, with the FDIC able to adjust requirements according to risk. After that period, capital would have to remain commensurate with the issuer’s activities and risk profile.

A separate operational backstop would consist of highly liquid assets calibrated to operating expenses. The distinction mattered: reserve assets supported token redemption, while capital and the operational backstop were intended to absorb business and operating risks.

Risk-management provisions covered internal controls, information systems, operational resilience and internal audit functions. Proposed custody standards would require customer assets to be treated as customer property, protected from custodial creditors and separately accounted for, with commingling restricted.

The draft also prohibited supervised issuers from claiming that their payment stablecoins were FDIC-insured. It proposed restrictions on paying interest or yield merely for holding or using a stablecoin and on extending customer credit to finance stablecoin purchases.

Stablecoins were not tokenized deposits

The proposal drew an important line around deposit insurance. Bank deposits used as stablecoin reserves would be corporate deposits of the issuer; insurance would not pass through those reserves to stablecoin holders. A payment stablecoin therefore would not become an insured deposit merely because its backing included deposits at an insured bank.

Tokenized deposits received different treatment. The FDIC said a blockchain-recorded instrument satisfying the Federal Deposit Insurance Act’s statutory definition of a deposit would remain a deposit. Changing the recordkeeping technology would not create a separate legal category.

That distinction placed payment stablecoins and tokenized bank liabilities on different regulatory tracks even when both could be used for digital settlement.

What remained unsettled

Chairman Hill said the proposal requested comment on 144 questions, including permissible activities, capital, pass-through insurance and yield restrictions. The FDIC planned a 60-day comment period following Federal Register publication.

Consequently, the April 7 action established the agency’s proposed direction, not binding final requirements. Public comments, interagency coordination and subsequent board action could change the text. No market-price reaction is attributed to the announcement because the cited records do not establish a causal trading response using a defined venue and measurement window.