The U.S. Federal Reserve (Fed) has proposed two Genius Act implementing regulations for supervising stablecoin issuers, CoinDesk reported. The two regulations will enter a 60-day public comment period, specifying the legal and supervisory framework for stablecoin issuance. The first proposal sets capital and reserve requirements to ensure stablecoins are sufficiently backed by highly liquid assets, and defines stablecoin-related activities that banks supervised by the Fed can undertake. It also addresses the payment of interest or returns to stablecoin holders, and certain third-party linkage methods may be considered prohibited activities. The second proposal outlines the procedures for regulated banks to issue their own stablecoins. Banks must submit a business plan, financial information, relevant policies and procedures, and other materials. The Fed emphasized that stablecoins must be redeemable quickly and stably at par value even during market stress. The preparation of the Genius Act regulations was originally scheduled to be completed by July of this year, but the work of the Fed, Treasury Department, and other related agencies has exceeded the statutory deadline. The Treasury Department proposed separate implementing regulations in August, and the FDIC (Federal Deposit Insurance Corporation) and multiple federal agencies have also begun preparing related regulations.
