TL;DR
- FDIC starts formal rulemaking for bank-issued stablecoins under GENIUS Act.
- Proposal opens a 60-day public comment period for the new framework.
- Banks must submit detailed applications for regulator review and approval.
The U.S. Federal Deposit Insurance Corp. (FDIC) opened its first formal rulemaking process tied to the GENIUS Act, marking an initial regulatory framework for stablecoin issuance by insured banks. The agency released a proposed rule that defines how depository institutions can apply to create subsidiaries dedicated to issuing dollar-backed tokens. The FDIC board approved a 60-day public comment period to gather input before final adoption.
The proposal sets a structured path for banks seeking approval. Institutions submit applications, regulators conduct reviews, and the agency delivers decisions within a 120-day review window. The framework also includes an appeals channel for denied applications. All three current board members voted in favor of opening the process, signaling unified support at the agency level.
The FDIC operates under Acting Chairman Travis Hill, also nominated by President Donald Trump for the permanent role. Hill stated that the proposal allows regulators to assess safety and soundness while reducing unnecessary administrative load for applicants. The approach keeps statutory standards intact and applies them through a defined review process.
Application rules define early structure for bank-issued stablecoins
Congress approved the Guiding and Establishing National Innovation for U.S. Stablecoins Act, assigning oversight roles across federal agencies. For insured depository institutions, the FDIC serves as the primary regulator. The current proposal addresses application mechanics rather than financial thresholds.
Banks interested in issuing stablecoins must submit formal letters describing business activities, financial condition, and operational plans designed to support stable issuance. Regulators evaluate submissions against statutory factors and issue determinations within the stated timeline.
Hill also noted that the FDIC plans a separate rule covering capital, liquidity, and risk management standards for bank-affiliated stablecoin issuers. The agency plans to review public feedback before releasing a final version of the application rule.
The proposal marks the first operational step toward bank-regulated stablecoins under federal law. With public input underway, the FDIC advances from legislative mandate to supervised execution within the U.S. banking system.
Centralization and loss of the fundamental crypto system
The FDIC proposal integrates the issuance of stablecoins directly into the traditional regulated banking system. For many in the industry, this represents the co-opting of technology by the established institutions that cryptocurrencies originally sought to challenge or complement. The philosophy of decentralization and autonomy of the financial system becomes subordinate to the permissions, reviews, and oversight of government entities.
