The Federal Reserve published two draft rules to regulate stablecoin issuers, implementing the GENIUS Act passed in July 2025. The proposals require full backing of circulating tokens with high-quality liquid assets such as short-term US Treasury bills, along with standardized capital to absorb operational losses. Supervised banks wishing to issue stablecoins through a subsidiary must submit a specific application to the Fed, including a business plan and financial projections. Fed governors approved both proposals unanimously, though Michael Barr requested adjustments regarding interest rate risks, redemption rights clarity, and AML compliance thresholds. The proposals are subject to a sixty-day public consultation period following publication in the Federal Register.
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