US Fed, tightens stablecoin regulations...proposes two sub-regulations under the GENIUS Act

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The U.S. Federal Reserve (Fed) has introduced two new regulations that significantly strengthen reserve requirements and bank issuance procedures to establish a supervisory framework under the stablecoin regulation act, GENIUS.

According to cryptocurrency specialized media CryptoPotato on September 26 (local time), the Fed announced two specific proposed regulations to supervise payment stablecoin issuers based on the stablecoin regulation act, GENIUS, and initiated a public comment period. This proposal is a measure to establish a unified federal regulatory framework to protect financial stability and strengthen anti-money laundering (AML) surveillance, including countering the financing of terrorism (CFT).

The first proposed regulation mandates that payment stablecoin issuers supervised by the Fed must fully collateralize the token's value with highly liquid assets, such as short-term U.S. Treasury bills. It also stipulates the establishment of standardized capital requirements to absorb credit and operational risks, and the creation of new risk management standards for all stablecoin-related businesses. Furthermore, it clarified regulatory measures for custodial institutions holding stablecoin reserve assets, along with the scope of permissible activities for Fed-supervised banks to participate in.

The second proposed regulation focuses on the authorization procedures that Fed-supervised banks must follow when they wish to directly issue payment stablecoins. Banks applying for issuance must submit detailed business plans and financial information, and procedures for appealing authorization decisions and holding hearings have also been formalized. These proposed regulations will be finalized after a 60-day public and industry comment period from the date of their publication in the Federal Register.

Fed Vice Chair Michael Barr stated that the value of stablecoins can only be maintained if users can redeem them quickly at par value. Barr said, “Within the framework provided by the GENIUS Act, this rulemaking is an important step in the right direction,” adding, “We positively evaluate the restricted reserve asset provisions and the establishment of transparent and standardized capital requirements, and public feedback is particularly important on whether interest rate and foreign exchange volatility risks are sufficiently addressed.”

The stablecoin regulation act, GENIUS, officially went into effect on July 18, 2025, after congressional discussions and President Donald Trump's signature. With the Treasury Department providing key legal definitions and the Federal Deposit Insurance Corporation (FDIC) commencing related supervisory procedures, and now the Fed preparing detailed implementation rules, the institutional integration of the U.S. stablecoin market is gaining full momentum.

[Key Article Summary]

-The Fed proposed two regulations under the GENIUS stablecoin regulation act, mandating full reserve requirements for issuers and authorization procedures for bank issuance.

-Issuers must collateralize value with highly liquid assets such as short-term Treasury bills, and banks must undergo strict reviews, including submitting business plans.

-Fed Vice Chair Michael Barr emphasized the importance of ensuring immediate par value redemption and standardized capital requirements.

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