Federal Reserve seeks comment on two GENIUS Act stablecoin proposals

The Federal Reserve Board requested public comment on two proposals for regulating Board-supervised payment stablecoin issuers under the GENIUS Act. The first proposal would require issuers to fully back stablecoins with permissible reserve assets. Examples include short-term Treasury bills and certain other high-quality, liquid assets. The proposal would establish standardized capital requirements for certain credit and operational risks. It would also establish risk management standards. Separate rules would cover Board-supervised firms that safekeep assets backing payment stablecoins. The proposal would clarify which stablecoin and related activities Board-supervised banks may conduct. The second proposal would create a tailored application process for Board-supervised banks seeking to issue payment stablecoins. Applicants would submit a business plan and financial information. Applicants would also submit other required documents. The proposal would establish procedures for appeals, hearings, and final determinations on applications. The comment period will close 60 days after publication in the Federal Register.