The Federal Reserve has published its proposed rules for the stablecoin issuers it will oversee under the GENIUS Act. It is the third federal regulator to do so, after the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). On reserves the Fed takes the lightest approach of the three. On capital it is the most prescriptive.
Currently, the Fed’s rules won’t be relevant to a large number of issuers. It covers stablecoin subsidiaries of state chartered banks that are members of the Federal Reserve System, plus uninsured state chartered depository institutions, such as Wyoming’s special purpose banks, once their issuance exceeds $10 billion. Most of today’s large issuers hold state or national trust charters and answer to the OCC.
That narrow scope shapes the reserve rules. Both the OCC and FDIC proposed a cap of 40% of reserves at any single financial institution, and the OCC added a requirement to keep at least 10% in bank or Fed accounts and a 20 day limit on average maturity. The Fed proposes none of these. It asks issuers to diversify enough to stay fully backed under stress, says reserves should be “predominantly” Treasuries, and leaves the numbers to consultation questions.
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