FDIC Unveils Stablecoin Rules: Reserves, Redemption, and No Pass-Through Insurance

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FDIC Opens Door to Bank Stablecoins Under GENIUS Act

Key Highlights

  • FDIC approved a proposed rule to implement key GENIUS Act standards for FDIC-supervised stablecoin issuers.
  • The proposal would require identifiable reserves, tailored capital and risk controls, and redemption within two business days.
  • It also clarifies that tokenized deposits remain deposits if they meet the legal definition, regardless of the technology used.

The FDIC is taking steps to regulate how banks work with stablecoins, a type of digital currency. At a meeting on April 7, 2026, FDIC Chairman Travis Hill announced a new proposal that will put many parts of the GENIUS Act into effect and provide clearer rules for stablecoins and digital deposits held by banks.

Hill explains that the new rule would set financial safeguards for companies issuing payment stablecoins if those companies are part of banks already overseen by the FDIC. These safeguards cover things like how much money they need to have in reserve, how they handle customer redemptions, what they’re allowed to do, and the amount of capital both the stablecoin company and its parent bank must hold.

FDIC sharpens its stablecoin framework

According to Chairman Travis Hill, the new proposal aims to put many parts of the GENIUS Act into practice and provide clearer rules for stablecoins and tokenized deposits. The proposal is now open for feedback on 144 specific points, covering topics like what activities are allowed, how capital should be handled, insurance coverage, and the restrictions on offering returns.

The FDIC is building on its initial rules from December 2025 regarding banks wanting to offer payment stablecoins. While the first set of rules focused on how banks apply for approval, this new proposal details the standards those approved banks will need to follow to operate.

The FDIC will take feedback on the new proposal for 60 days starting when it’s published in the Federal Register.

No pass-through insurance for stablecoin holders

A key aspect of the plan involves deposit insurance. The FDIC has clarified that deposits used as reserves for a payment stablecoin won’t be directly insured for stablecoin holders; insurance won’t ‘pass through’ to them.

Back in March, Hill suggested this approach, but pointed out a conflict: labeling stablecoin holders as insured depositors would clash with the GENIUS Act, which prevents payment stablecoins from being advertised as federally insured.

As a researcher following this closely, I anticipate a significant debate during the public comment period. It seems issuers and their banking partners are carefully trying to promote regulated stablecoins as secure payment options, but they’re walking a tightrope – they need to avoid any language that might suggest these coins function like traditional bank deposits. This expectation stems directly from the concerns the FDIC specifically highlighted when requesting public feedback.

Tokenized deposits get formal recognition

The proposal clarifies that deposits held as tokens would still be federally insured as long as they meet the legal definition of a deposit. The agency emphasized that insurance coverage shouldn’t be affected by *how* a bank records its deposits, whether through traditional or new technologies.

This is significant because U.S. financial regulators have been working for the past year to clearly distinguish between digital deposits issued by banks and payment stablecoins governed by the GENIUS Act. The Office of the Comptroller of the Currency (OCC) introduced its own rules in late February to put the stablecoin law into effect for the banks it oversees, and the FDIC’s proposed rules are largely consistent with that approach.

Open Questions for Industry

The FDIC is asking for public input on many different aspects of its proposal, including 144 specific questions. They’re particularly interested in feedback on what stablecoin companies should and shouldn’t be allowed to do, how much capital they should be required to hold, how deposit insurance will work with stablecoins, and whether stablecoin holders should be allowed to earn interest.

Hill concluded by expressing his gratitude to the FDIC staff for their work on the proposal and stated he anticipates reviewing feedback from the industry as the rule-making process continues.

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2026-04-07 21:24