Federal Reserve Proposes Capital and Reserve Rules for Stablecoin Issuers

The Federal Reserve Board has proposed new reserve, capital, and risk management regulations for stablecoin issuers under its supervision, including requirements for state member bank subsidiaries. Issuers must maintain reserves equal to the par value of outstanding tokens and meet operational risk capital charges. The proposal also bars issuers from paying prohibited yield to holders through third-party arrangements, consistent with the GENIUS Act.