Federal Reserve Proposes New Reserve and Capital Standards for Stablecoin Issuers

The Federal Reserve has introduced two proposed rule packages under the GENIUS Act to regulate payment stablecoin issuers. The proposals require issuers to maintain full backing with permitted reserve assets, such as short-term Treasury bills, and adhere to standardized capital and risk-management requirements. Additionally, the Fed aims to establish a formal application process for supervised banks seeking to issue stablecoins. The proposals are currently subject to a 60-day public comment period.