FDIC proposes first GENIUS Act rule to establish stablecoin issuer application procedures

The FDIC board unanimously approved its first comprehensive regulatory framework implementing the GENIUS Act on April 7, 2026, establishing rules for FDIC-supervised banks to issue payment stablecoins through subsidiaries. The framework prohibits stablecoin issuers from paying yield to customers and requires them to hold sufficient FDIC-approved assets to fully back stablecoins, with no more than 40% of reserves held with a single custodian and monthly reporting and auditing requirements. The rule clarifies that FDIC insurance covers stablecoin reserves only as corporate deposits, not on a pass-through basis to holders, and requires redemptions within two business days. Simultaneously, the FDIC proposed stripping back anti-money laundering requirements to focus on higher-risk activities and finalized a rule with the OCC prohibiting examiners from evaluating banks based on public perception unless it presents financial or operational risks. FDIC Chair Travis Hill emphasized alignment with the OCC's March 2026 proposal, while Treasury Secretary Scott Bessent characterized the changes as restoring common sense to financial regulation.

FDIC's proposed stablecoin regulatory framework under the GENIUS Act

• ▪The FDIC's two proposed rules related to the GENIUS Act will be open for comment for 60 days.
• ▪The FDIC's proposed rule limits stablecoin issuers to holding no more than 40% of reserves with a single custodian.
• ▪The FDIC announced in February 2026 it would extend the comment period for its December 2025 stablecoin application process rule to May 18, 2026.
• ▪The FDIC's proposed rule would reaffirm by regulation that deposits in tokenized form remain deposits under the Federal Deposit Insurance Act.
• ▪FDIC Chair Travis Hill stated the FDIC's proposed stablecoin framework aligns in many respects with the Office of the Comptroller of the Currency's proposal.
• ▪The FDIC board proposed a rule in December 2025 setting the process for FDIC-supervised banks to apply to issue payment-stablecoins through subsidiaries.
• ▪The FDIC's proposed rule would require stablecoin issuers to hold sufficient FDIC-approved assets to fully back stablecoins they issue.
• ▪The Treasury Department proposed criteria in April 2026 for assessing when state-level stablecoin regulatory frameworks are substantially similar to the federal framework.
• ▪The Federal Deposit Insurance Corporation board proposed a regulatory framework implementing the GENIUS Act on April 7, 2026.
• ▪The Office of the Comptroller of the Currency released a GENIUS Act rule in March 2026.
• ▪The Office of the Comptroller of the Currency's GENIUS Act proposal officially bars platforms from paying yield on stablecoins held in custody but allows challenges under a rebuttable standard.

Streamlined anti-money laundering requirements and regulatory coordination

• ▪The FDIC's proposed anti-money laundering rule is in line with the Financial Crimes Enforcement Network's proposal issued on April 7, 2026.
• ▪Treasury Secretary Scott Bessent stated the proposed anti-money laundering rule restores common sense with a focus on keeping bad actors out of the financial system.
• ▪The FDIC proposed a rule on April 7, 2026 stripping back anti-money laundering requirements to align with the administration's deregulatory push.
• ▪The FDIC's proposed anti-money laundering rule would require the FDIC to notify FinCEN 30 days or more before pursuing significant anti-money laundering actions.
• ▪FDIC Chair Travis Hill stated the proposed anti-money laundering rule aims to avoid penalizing banks for relatively minor mistakes and instead focus on effectiveness.

Finalized rule removing reputational risk from bank supervision

• ▪The FDIC and Office of the Comptroller of the Currency finalized a rule on April 7, 2026 codifying the removal of reputational risk from bank supervision.
• ▪Comptroller Jonathan Gould stated the Office of the Comptroller of the Currency continues to review alleged debanking actions of the largest national banks under President Trump's executive order.
• ▪The FDIC and OCC proposed a rule in October 2025 that would have prohibited examiners from raising issues about anything other than financial condition.

Perspective of Stablecoin issuers and crypto industry

• ▪The FDIC's reserve concentration limit of 40% per custodian requires stablecoin issuers to diversify their custody arrangements.

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