The Federal Reserve on Thursday proposed two rulemakings to operationalize the GENIUS Act, requiring issuers under its supervision to fully back payment stablecoins with approved reserves and laying out application procedures for banks seeking to mint the tokens. Public comments close 60 days after the rules appear in the Federal Register.

The first proposal would obligate Fed-supervised stablecoin issuers to hold reserves in short-term US Treasury bills and other high-quality liquid assets. It sets capital requirements for credit and operational risk and adds risk-management standards for stablecoin activity. The second proposal clarifies which stablecoin-related activities supervised firms may conduct, the documentation required for a bank to issue payment stablecoins, and the appeals and hearing process for denied applications.

What do the two proposals cover?

• Reserve and capital rules. Issuers supervised by the Fed must back tokens 1-to-1 with approved assets, chiefly short-dated Treasuries and other high-quality liquid assets, and meet capital thresholds calibrated to credit and operational risk.
• Risk-management standards. The first rule adds standardized risk-management expectations for stablecoin operations across supervised entities.
• Bank activity and applications. The second rule defines permissible stablecoin activity for Fed-supervised banks and prescribes the business plans, financial information and supporting documents needed to apply for issuance authority.
• Administrative process. The package also sets out hearing and appeal rights for institutions whose applications are rejected.

How does the proposal fit the broader GENIUS Act timeline?

The GENIUS Act moved through Congress in 2025 and was signed into law by President Donald Trump on July 18, 2025, creating the first federal framework for US payment stablecoins. Since then, multiple agencies have sequenced complementary rulemakings. The Treasury Department last month proposed federal definitions governing who may issue US stablecoins and which entities fall under the statute. The Federal Deposit Insurance Corp. opened its own regulatory process in December. In June, several agencies jointly proposed requiring stablecoin issuers to verify customer identities in line with existing financial regulations.

The Fed's package sits inside that sequence, targeting the prudential backbone of the regime: what counts as a compliant reserve, how much capital an issuer must hold, and how a supervised bank earns the right to issue.

What did Fed Governor Michael Barr say?

Barr backed the rulemaking as a constructive step under the GENIUS Act framework and pointed to the comment questions on reserve composition and capital as the points where outside input matters most. He said:

"I support the proposed rulemaking as a step in that direction within the framework provided by the GENIUS Act, particularly as the rulemaking identifies key questions on which public feedback will be important. I am encouraged by provisions for reserve asset limitations, as well as transparent and standardized capital requirements. It will be useful to have public input on both of these aspects of the proposal, and in particular on whether the rule adequately addresses interest rate and foreign currency risks."

What changes for issuers and banks?

For non-bank issuers that fall under the Fed's supervisory perimeter, the package translates the GENIUS Act's reserve mandate into a binding prudential rule, with capital charges tied to the credit and operational profile of the stablecoin book. For banks, the activity and application rules create a defined path to issuance: a written application, a business plan, financials, and a hearing-and-appeal route if the Fed denies the request. The 60-day Federal Register clock now governs how quickly those mechanics harden into binding supervisory expectations.

What comes next?

The comment window closes 60 days after Federal Register publication, after which the Fed will review submissions on interest-rate and foreign-exchange risk treatment before finalizing. Treasury's parallel definitional rule and the FDIC's process remain on their own tracks, leaving issuers to track at least three agency dockets before the GENIUS Act regime is fully operative.