The Federal Reserve has proposed a regulatory framework for stablecoin issuers operating under the GENIUS Act, according to The Crypto Times, marking the central bank's first formal rulemaking tied to the federal stablecoin legislation.

The proposal represents the Federal Reserve's effort to translate the Guiding and Establishing National Innovation for U.S. Stablecoins Act into binding supervisory requirements for banks, payment companies and non-bank issuers that handle dollar-pegged tokens.

Why does the rulemaking matter?

The GENIUS Act, enacted earlier this year, created a federal floor for stablecoin issuance, requiring 1:1 reserve backing, redemption rights and a defined regulatory perimeter. The Federal Reserve's proposal operationalizes that statute, defining how supervised institutions interact with stablecoin activity that touches the banking system.

The framework addresses a market that has expanded rapidly. Stablecoin transaction volumes routinely exceed tens of billions of dollars daily, with issuers including Circle (USDC) and Tether (USDT) anchoring liquidity across crypto trading venues and cross-border payment corridors.

What entities fall under the new rules?

The rulemaking targets three categories. State-chartered banks and federal thrifts providing stablecoin custody or settlement services face new prudential requirements. Payment platforms that issue or distribute tokens will operate under a defined federal perimeter. Non-bank issuers above statutory size thresholds fall under direct Federal Reserve supervision.

Each category carries distinct capital, liquidity and reporting obligations, aligning stablecoin oversight with the Federal Reserve's existing supervisory regime for depository institutions.

What changes for existing issuers?

Stablecoin issuers have historically operated under a patchwork of state money transmitter licenses and informal federal guidance. The proposal would replace that fragmentation with a unified federal standard, a shift that analysts expect to accelerate institutional adoption of tokenized dollar assets.

Insured depository institutions have largely avoided direct stablecoin exposure under the existing regime. The proposed rules would clarify the path for banks to provide custody and settlement services, potentially opening a new product category for traditional lenders.

What is the implementation timeline?

The Federal Reserve's proposal will enter a public comment period following publication in the Federal Register. Industry participants — including banks, crypto-native firms and trade associations — are expected to file comments on capital treatment, custodial permissions and the interaction between state trust company charters and the new federal framework.

The pace of finalization will shape when U.S. banks can launch stablecoin products under the GENIUS Act regime. Federal Reserve Chair Jerome Powell has previously indicated the central bank intends to move quickly on implementation.

Smaller issuers have signaled concern that the Fed's prudential standards could push issuance toward the largest institutions, concentrating market power among banks with the resources to absorb compliance costs. The comment period outcome will determine whether the final rules preserve space for non-bank competitors or effectively consolidate the market among a handful of systemically important institutions.