New U.S. FDIC rules! Stablecoin reserves face strict requirements and do not receive the $250k deposit insurance coverage per person

FDIC rolls out a stablecoin regulatory framework to implement the GENIUS Act, requiring 1:1 reserves and 2-day redemptions, clarifying that deposit insurance does not apply.

A federal regulatory framework takes shape—FDIC advances GENIUS Act rule details

The Federal Deposit Insurance Corporation (FDIC) approved a new rule proposal yesterday (4/7), establishing the first comprehensive prudential supervisory framework for the issuance and management of stablecoins by banks under its jurisdiction and their affiliates. The initiative is designed to carry out the GENIUS Act, which was signed into law last year by the Trump administration, and it marks a key step by the U.S. federal government toward regulating dollar-pegged digital assets.

Under the proposal, the FDIC will define “Permitted Payment Stablecoin Issuers” (PPSIs). These entities are expected to operate as subsidiaries of FDIC-regulated institutions, and must meet strict requirements for capital, reserves, and risk management.

FDIC Vice Chairman Travis Hill said in a board meeting that, as the use of stablecoins in payment infrastructure continues to expand, the framework is intended to address potential operational risks and maintain stability in the financial system. This new regulation is the second major round of supervisory action following last December’s FDIC procedures for banks applying—through affiliates—to issue stablecoins.

At the same time, the Office of the Comptroller of the Currency (OCC) also released a corresponding supervisory framework for its jurisdictional entities in February this year, showing that U.S. federal financial regulators are working to build a unified stablecoin regulatory system.

Strict 1:1 reserve and liquidity requirements to ensure 2-day redemption processing

In managing reserve assets, the FDIC’s proposal requires stablecoin issuers to maintain 1:1 fully backed reserves, and to strictly separate these reserves from other business activities of the issuer. Eligible reserve assets are limited to highly liquid, low-risk instruments, including: U.S. currency, balances held at Federal Reserve Banks, insured bank deposits, short-term U.S. Treasuries, and specified overnight repurchase agreements. The issuer must monitor reserve assets daily and undergo periodic audits. In addition, the proposal also sets concentration limits for reserve holdings to reduce exposure to a single counterparty, ensuring sufficient redemption capacity even during periods of market stress.

For the redemption mechanism that investors care about most, the rule establishes clear service standards. The issuer must publicly disclose a clear redemption policy and should process redemption requests within 2 business days. To guard against runs, the FDIC requires that if the amount redeemed on a single day exceeds 10% of the outstanding total, the issuer must immediately notify the regulator and may, as appropriate, apply to extend the redemption timeline. This mechanism is designed to provide market transparency while giving regulators an early warning to prevent individual stablecoin liquidity issues from evolving into systemic financial risk.

Capital buffers and operating thresholds—strictly defining the boundaries of interest income

In addition to reserve asset requirements, the FDIC also imposes strict capital and operating requirements on issuers. During the first 3 years of operations, new payment stablecoin issuers must maintain at least $5 million in initial capital, and the subsequent capital structure should be primarily composed of common equity Tier 1 capital. Beyond statutory capital requirements, issuers must also hold a separate liquidity buffer equal to 12 months of operating expenses; this funding is explicitly defined as distinct from stablecoin reserve funds. Additionally, for large issuers with market value exceeding $50 billion, the FDIC will require more frequent annual reviews and dedicated compliance examinations.

With respect to product attributes, the FDIC draws a red line on the interest-bearing nature of stablecoins. The proposal explicitly restricts issuers from advertising that stablecoin holders can earn interest or profits; even any incentive rewards offered through third-party arrangements are subject to strict scrutiny. This rule reflects the regulator’s position that stablecoins are payment tools rather than savings products. In terms of operational resilience, issuers must establish robust cybersecurity systems covering private key management, blockchain monitoring, incident response, and annual anti-money-laundering compliance certifications to ensure the security and compliance of digital assets at the technical level.

Deposit insurance boundary clarification—stablecoins do not receive pass-through protection

One of the most important clarifications in this regulatory framework concerns the scope of deposit insurance applicability. The FDIC clearly states that the stablecoins issued under this framework themselves do not receive standard deposit insurance protection of $250,000 per person. This means that the reserves held by the issuer in a bank would be treated as the issuer’s corporate deposits, and token holders do not have individual insurance coverage. This prohibition on pass-through insurance is intended to prevent the market from mistakenly perceiving stablecoins as having the same federal backing as bank deposits, thereby maintaining the risk boundaries between stablecoins and the traditional financial system.

However, the FDIC also offers different treatment to tokenized deposits. If traditional bank deposits are presented only in tokenized technological form, and still meet the legal definition of bank deposits, they can continue to receive standard deposit insurance coverage. The proposal is currently in a 60-day public comment period, during which the FDIC is seeking public feedback on 144 specific issues, including capital calibration, eligible assets, and the interest prohibition.

• Related news: The U.S. Treasury launches GENIUS Act rule details; stablecoin regulation opens a 60-day public comment period

As the implementation deadline set by the GENIUS Act in mid-2026 approaches, federal regulators are accelerating the refinement of these rules. At the same time, the U.S. Senate is also in final negotiations over the controversy in the CLARITY Act regarding interest and rewards on stablecoins; the full legal codification of stablecoins has become a core issue for U.S. crypto financial policy in 2026.