Michaela
Key Points
- The FDIC proposes the first U.S. rules for banks issuing stablecoins under the GENIUS Act.
- Applications must detail activities, ownership, and include an engagement letter from a registered public accounting firm.
- The rule outlines review procedures, statutory evaluation, processing timelines, and an appeal process for denied applications.
The U.S. Federal Deposit Insurance Corporation (FDIC) Board of Directors has announced a proposed rule to establish application procedures under the GENIUS Act, marking a key step in stablecoin regulation.
In a December 16 press release, the FDIC announced that its board of directors has approved the notice of proposed rulemaking and is now seeking public feedback. FDIC counsel Nicholas Simons explained that applications must outline proposed activities, detail the subsidiary’s ownership and control structure, and include an engagement letter from a registered public accounting firm.
“The GENIUS Act allows insured depository institutions to issue payment stablecoins through a subsidiary and to engage in certain related activities,” the FDIC wrote. “An FDIC-supervised state nonmember bank or state savings association seeking to issue payment stablecoins through a subsidiary is required to apply to the FDIC for the subsidiary to be approved as a permitted payment stablecoin issuer,” the corporation added.
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Furthermore, the proposed rule seeks to implement Section 5 of the GENIUS Act, mandating that the FDIC review applications, evaluate them according to statutory criteria, process submissions within designated timeframes, and establish an appeal mechanism for any denied applications. This rule provides a structured framework for banks seeking to operate stablecoin subsidiaries under the new legislation.
The FDIC’s proposed rule represents a significant step toward integrating stablecoins into the regulated banking system, offering clarity to financial institutions and innovators eager to explore digital dollar-backed tokens.
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By outlining a structured application and review process, the agency aims to balance innovation with prudential oversight, ensuring that new entrants maintain sound financial and operational practices. The public comment period opens the door for stakeholders, industry experts, and advocacy groups to provide input on practical considerations, potential risks, and implementation strategies.
As the digital asset landscape continues to evolve, this initiative signals that regulators are actively working to establish a framework that promotes both safety and growth. For banks, fintechs, and other players in the crypto space, these early steps from the FDIC could set the tone for how stablecoins are issued, monitored, and integrated into the broader financial system, shaping the next phase of digital finance in the United States.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
