Fed stablecoin proposal links capital requirements to circulation volume

The Federal Reserve has announced a proposal that would impose a baseline operational-risk capital charge on supervised stablecoin issuers based on the volume of coins in circulation. For the first $20 billion in outstanding stablecoins, the Fed proposes a 2% capital charge, with marginal rates decreasing for higher thresholds. This requirement would apply to state-chartered issuers transitioning to Fed supervision and specific subsidiaries of insured state member banks, marking a distinct regulatory approach compared to the Office of the Comptroller of the Currency.