- The institution has proposed tiered capital charges and a two-business-day redemption window for stablecoin issuers.
- Issuers must publish monthly, audited reserve reports and certify them via CEO and CFO.
The Federal Reserve has introduced a proposal that ties stablecoin promises to hard capital, fast redemptions, and transparent reserves, marking a decisive step to implement the GENIUS Act. The rules aim to make sure that when holders ask for their money back, the system can deliver, even in turbulent markets.
The GENIUS Act already mandates one-to-one reserves and narrows eligible assets to cash, bank deposits, and short-term US Treasurys. It also tasked federal regulators with filling in the details on capital buffers, reserve diversification, and risk management. The Fed’s new proposal supplies that missing scaffolding for issuers under its supervision.
The Fed would impose an operational-risk capital charge that rises with the size of the stablecoin float. Issuers would hold capital equal to 2% of the first $20 billion outstanding, 1.5% of the next $30 billion, and 1% of amounts above $50 billion.
On top of that, the proposal adds further capital requirements linked to credit and operational risks. The structure targets larger programs with more systemic footprint while still requiring meaningful buffers across the board.
The proposal generally requires issuers to process redemptions within two business days. If reserves slip below the one-to-one backing, the issuer must notify the Fed and either restore reserves under a remediation plan or liquidate assets and redeem all outstanding stablecoins.
Last year, Trump signed the GENIUS Act into law, establishing the United States’ first dedicated regulatory framework for dollar-backed stablecoins. The move, welcomed by crypto supporters and met with caution by consumer advocates, signals a major policy shift aimed at bringing digital assets into the mainstream financial system.
Capital, Redemption, and Transparency at the Core
Transparency moves from slogan to routine. Issuers would publish monthly reports showing the total outstanding stablecoins and the value and composition of reserves. A registered public accounting firm must examine the disclosures, and the issuer’s CEO and CFO must certify them. The design pushes accountability to the top of the house and gives the market a regular, audited view of backing.
Continue reading: Georgia Taps Tether For A National Stablecoin Launch
The Fed also outlined how its supervised banks could seek approval to issue payment stablecoins through subsidiaries. Applicants would submit a business plan and financial information as part of the approval process. The move signals that traditional banking entities can enter the space, but only under a defined supervisory gateway.
Fed Governor Michael Barr supported the proposal and stressed that stability depends on reliable, prompt redemption at par across conditions.
The proposals enter a 60-day public comment period after publication in the Federal Register. The GENIUS Act takes effect on January 18, 2027, or 120 days after federal regulators issue final implementing rules, whichever comes first. That calendar gives issuers a defined runway to adjust capital, operations, and reporting before the law’s core requirements go live.
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