The Federal Reserve on September 24, 2026 proposed a regulatory framework for payment stablecoin issuers under its supervision, converting the GENIUS Act's statutory foundation into enforceable reserve, capital and risk-management standards.

The package spans four operational areas:

• Reserve backing requirements
• Capital requirements
• Risk-management standards
• Bank authorization procedures

A 60-day public comment window opens after Federal Register publication.

What does the proposal require from issuers?

The framework rests on a redemption principle. The Federal Reserve would require Board-supervised payment stablecoin issuers to fully back tokens with permitted reserve assets — short-term U.S. Treasury bills and other high-quality liquid instruments.

That requirement addresses the foundational question for stablecoins. Value depends not simply on blockchain technology, but on confidence that a token advertised as redeemable for one dollar can actually convert into dollars at par.

Federal Reserve Governor Michael Barr said reliable and prompt redemption must remain possible even during periods of market stress, when supposedly liquid assets can themselves experience pressure.

The framework also introduces standardized capital requirements addressing credit and operational risks tied to stablecoin activity. Risk-management standards would accompany those capital rules. Separate requirements would cover institutions safeguarding the reserve assets.

How would bank entry into stablecoin issuance work?

Board-supervised insured state member banks would need Federal Reserve approval before establishing subsidiaries that issue payment stablecoins. Applicants would submit business plans and financial details.

The proposed process establishes an administrative track with defined steps:

• Hearings
• Appeals
• Final determinations by the Board

The authorization layer adds a gatekeeping step to a market that previously operated without uniform federal entry standards.

The proposal also clarifies which stablecoin-related activities remain permissible for banks under existing supervisory rules.

What policy concerns does the framework address?

Federal Reserve officials have previously identified potential stablecoin applications in remittances, global trade and treasury management. Officials have flagged money-laundering, terrorist-financing and financial-stability risks tied to the instruments.

Stablecoins increasingly sit at the intersection of cryptocurrency markets, payment infrastructure and traditional banking — a position that draws both opportunity and scrutiny. The Federal Reserve's proposals are part of that implementation process, translating statutory requirements into standards that supervised institutions must follow.

What comes next in the rulemaking timeline?

The proposal is not final. Industry participants, banks and technology companies can submit comments during the 60-day window after Federal Register publication. Reserve quality, redemption rights, capital buffers, custody arrangements and supervisory requirements all remain open for revision.

The next phase will hinge less on whether regulation arrives and more on the architecture of the final regime. Those parameters — reserve composition, capital calibration, custody segregation and supervisory intensity — could determine how easily stablecoin issuers integrate with conventional finance or remain structurally separate from it.

The Federal Reserve's signal: stablecoins now occupy the same regulatory category as payment technologies with direct consequences for banking stability, not merely crypto instruments.