FDIC to Propose Stablecoin Rules Under GENIUS Act This Month

In prepared testimony for the House Financial Services Committee, acting FDIC Chair Travis Hill outlined a clear, two-phase timeline for the agency’s implementation of the GENIUS Act. The immediate priority is the issuance of a proposed rule later this month that will establish the FDIC’s application framework. This framework is critical as it will define the process through which financial institutions can seek approval to operate as payment stablecoin issuers under the FDIC’s supervision. Following this, Hill stated the agency plans to issue a second, more detailed proposed rule “early next year” focused specifically on implementing the GENIUS Act’s prudential requirements for these FDIC-supervised issuers.

This phased approach allows the FDIC to first set the procedural groundwork—clarifying who can apply and how—before layering on the substantive safety and soundness standards. The prudential requirements expected next year will likely cover critical areas such as capital adequacy, liquidity management, and operational risk, ensuring that entities issuing stablecoins maintain the stability and consumer protections associated with traditional, regulated financial services. This structured rollout provides the market with a predictable regulatory pathway.

The regulatory action directly stems from the passage of the GENIUS Act, a key piece of federal legislation designed to create a national framework for stablecoins. Prior to this law, the regulatory landscape for stablecoins—digital assets typically pegged to a fiat currency like the U.S. dollar—was fragmented, with oversight split between state and federal authorities and no unified set of rules. The GENIUS Act represents Congress’s effort to bring clarity and federal oversight to this market, assigning specific roles to agencies like the FDIC.

Travis Hill’s announcement to the House Financial Services Committee confirms that the FDIC “has begun work to promulgate rules” and is moving from the legislative phase to active implementation. This transition is a significant milestone, as it shifts the conversation from theoretical policy debates to concrete regulatory requirements. The FDIC’s involvement is particularly notable given its core mission of maintaining stability and public confidence in the nation’s financial system, a mandate it is now extending into the digital asset sphere through the oversight of payment stablecoin issuers.

The forthcoming FDIC rules carry profound implications for both traditional finance (TradFi) and the broader cryptocurrency ecosystem. For established banks and financial institutions considering entering the stablecoin space, the proposed application framework will provide the first official roadmap for gaining regulatory approval. This could encourage greater participation from traditional players, potentially legitimizing and stabilizing the market further.

For the crypto industry, the move represents a major step toward regulatory certainty. A clear federal framework overseen by the FDIC addresses one of the largest concerns for stablecoin projects and their users: the legal and operational risks associated with unclear oversight. By establishing prudential standards, the FDIC aims to mitigate the risks of runs or insolvencies that could threaten the peg of a stablecoin, thereby protecting consumers and the broader financial system. The testimony from acting chair Hill marks the start of a critical period where the abstract provisions of the GENIUS Act begin to take tangible form, setting the stage for a new era of regulated digital currency innovation in the United States.