Federal Reserve Proposes GENIUS Act Rules for Stablecoins and Bank Issuance

The Federal Reserve has released two proposed regulatory rules to implement the GENIUS Act. The first rule mandates that payment stablecoin issuers maintain 100% reserves in high-quality liquid assets, such as short-term US Treasury bonds, and establishes strict risk management and custody standards. The second rule creates a dedicated approval process for commercial banks to issue stablecoins, providing a transparent path for compliance and legal recourse. These rules, which will undergo a 60-day public comment period, aim to integrate compliant stablecoins into the traditional banking system by 2026 or 2027.