The U.S. Federal Reserve has proposed rules requiring Fed-supervised payment stablecoin issuers to fully back their tokens with short-term U.S. Treasury securities and other high-quality liquid assets, the central bank said, marking a major step in implementing the GENIUS Act of 2025.

The proposal also introduces standardized capital requirements aimed at credit and operational risks, new risk-management standards for issuers, and a separate rule track for firms that custody the assets backing stablecoins. Together the measures define how payment stablecoins — tokens engineered to maintain a fixed dollar value — would operate inside the U.S. regulated financial system.

What does the GENIUS Act require, and where does the Fed's proposal fit?

The GENIUS Act — formally the Guiding and Establishing National Innovation for U.S. Stablecoins Act — directed federal banking regulators and the Treasury Department to complete the implementing framework by July 2026. The Fed's proposal arrives after that statutory deadline, reflecting the slower-than-mandated pace of rulemaking across the agencies tasked with writing the stablecoin rulebook.

Under the Fed's plan, payment stablecoin issuers supervised by the central bank must back outstanding tokens one-for-one with permitted instruments such as Treasury bills and other high-quality liquid assets. The capital component imposes uniform thresholds to absorb losses tied to issuance, redemption, and custody activity. Risk-management standards would cover governance, stress testing, and disclosure obligations.

Fed Governor Michael Barr said the framework needs to ensure that stablecoins can be redeemed at par, including during periods of market stress. Barr identified three elements as central to the proposal:

• Reserve-asset limits
• Standardized capital requirements
• Clear redemption rights

How would banks issue stablecoins under the proposal?

Fed-supervised banks seeking to issue payment stablecoins would do so through a separately capitalized subsidiary using a tailored application procedure. Applicants must submit a business plan and detailed financial information. The proposal sets out procedures for hearings, appeals, and final decisions, giving the Fed a defined pathway to approve or reject individual bank issuers.

The framework also clarifies which stablecoin-related activities would be permitted for banks operating under the Fed's supervision, and it establishes a separate compliance regime for custodians that safeguard reserve assets on behalf of issuers. That split lets regulators calibrate capital and operational rules to the specific risk profile of issuance versus custody.

What is the status of stablecoin rewards and inter-agency coordination?

The proposal addresses stablecoin rewards, a feature that has emerged as a contested element in the new U.S. framework. Yield-bearing or interest-paying stablecoin products have drawn scrutiny from bank regulators concerned about deposit displacement at traditional institutions. The Fed has sought to align its treatment of rewards with earlier proposals from the Office of the Comptroller of the Currency, the agency that supervises nationally chartered banks.

The OCC and Treasury Department have issued related implementation guidance, and coordination among the three regulators is widely viewed as necessary to produce a workable rulebook. Industry participants will scrutinize whether the Fed's reward treatment converges with or diverges from the OCC's framework.

What deadlines and next steps apply?

The Federal Reserve will accept public comments for 60 days after the proposal is published in the Federal Register. Following the comment period, the Fed must review submissions, revise the proposal if warranted, and coordinate with the OCC and Treasury before issuing a final rule.

The package sets a concrete timeline for stakeholder input but leaves the date of a final rule to a subsequent Fed action. With the statutory deadline already passed, the 60-day window now governs the path to a finalized stablecoin framework under the GENIUS Act.