Federal Reserve requests public comment on two proposals related to establishing a regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act

The Federal Reserve Board has requested public comment on two proposals under the GENIUS Act that would set out a regulatory framework for Board-supervised payment stablecoin issuers. The first proposal would require fully backing payment stablecoins with specified permissible reserve assets, including short-term Treasury bills and other high-quality, liquid assets. It also lays out standardised capital requirements and risk management standards intended to address credit and operational risks in payment-stablecoin activities.

The proposal package also includes rules for Board-supervised firms that safekeep the reserve assets backing the stablecoins, and it clarifies the permissibility of stablecoin-related activities for Board-supervised banks. The second proposal focuses on a tailored application process for Board-supervised insured depository institutions seeking approval to issue payment stablecoins, including submission requirements such as a business plan and financial information, as well as processes for appeals, hearings and final determinations.

The Board notes that the comment period closes 60 days after publication in the Federal Register. For FX traders, the key macro link is indirect: changes in how stablecoins are capitalised and what reserve assets they must hold can influence demand for short-dated government securities and affect perceptions of financial-system resilience and operational risk in dollar-based payment channels.

What to watch next is the detail regulators provide in the consultation responses and any final rules that emerge, especially around reserve asset composition, capital requirements, and how supervisory expectations are implemented in practice.