Introduction
The U.S. Federal Deposit Insurance Corporation (FDIC) is poised to take a decisive step in regulating the digital asset market, with acting chair Travis Hill announcing the agency will release its first major proposal for implementing the GENIUS Act before December concludes. This initial framework will establish how banks can seek approval to issue payment stablecoins, marking the beginning of a structured federal oversight regime that has been anticipated since the law’s passage in July.
Key Points
- The FDIC will issue two key proposals: one for application frameworks (late December) and another for prudential standards (early 2025).
- The GENIUS Act creates a multi-agency oversight regime, with the FDIC supervising bank-affiliated stablecoin issuers and Treasury overseeing non-bank entities.
- Regulators including the Federal Reserve are concurrently developing their own capital and liquidity requirements for stablecoin issuers as mandated by the act.
A Two-Phase Regulatory Rollout
Acting FDIC Chair Travis Hill, in prepared testimony for a House Financial Services Committee hearing, outlined a clear, two-phase timeline for building the regulatory structure mandated by the GENIUS Act. The first proposal, expected before the end of December, will define the application framework for institutions seeking approval to operate as payment stablecoin issuers under FDIC supervision. This establishes the procedural gateway for banks to enter the market.
A second, more substantive proposal is slated for early next year. This rule will describe the prudential requirements for FDIC-supervised banks that issue stablecoins. As Hill stated, these standards will include specific capital rules, liquidity obligations, and detailed guidelines for the composition and quality of reserves backing the stablecoins. This layered approach—first defining who can apply, then setting the rules they must follow—aims to create a methodical and secure foundation for bank involvement in digital assets.
The GENIUS Act's Multi-Agency Oversight Framework
The regulatory push is driven by the GENIUS Act, which was signed into law by President Donald Trump in July. The legislation created a multilayered oversight regime that divides responsibility among federal and state agencies. Under this structure, the FDIC is specifically tasked with supervising stablecoin-issuing subsidiaries of insured depository institutions. Meanwhile, the Treasury Department and other agencies are responsible for overseeing non-bank issuers and other segments of the digital asset market.
This division of labor means coordination is crucial. The Treasury Department has already advanced its part of the implementation, having completed two rounds of public comment on its plan. The process for all agencies involves releasing proposals for public review, evaluating feedback, and then finalizing the rules. This procedural requirement means that, despite the imminent proposal from the FDIC, the complete regulatory framework for stablecoins is not expected to be finalized and take effect until 2026, underscoring the deliberate pace of federal rulemaking.
Broader Regulatory Developments and Guidance
Beyond the specific stablecoin rules, Hill indicated the FDIC is weighing broader recommendations from the President’s Working Group on Digital Asset Markets. Those recommendations urged regulators to provide clearer guidance on the activities banks may pursue in the digital asset ecosystem, including the issuance of tokenized liabilities. In response, Hill noted, “We are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenised deposits.” This suggests parallel efforts to clarify how traditional banking activities translate to blockchain-based formats.
The hearing also highlighted that other regulators are moving concurrently. Federal Reserve Vice Chair for Supervision Michelle Bowman testified that the central bank is developing its own set of capital, liquidity, and diversification requirements for stablecoin issuers, as also mandated by the GENIUS Act. This confirms that the regulatory architecture for digital assets is being constructed simultaneously across multiple agencies, each focusing on its designated area of authority within the new law’s framework.
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