- Key insight: The Federal Deposit Insurance Corp. Tuesday issued a proposed rule that would set up a process for banks to issue payment stablecoins, pursuant to the recently-passed GENIUS Act stablecoin legislation.
- Supporting data: Under the proposed rule, bank applications to issue stablecoins would be automatically approved after 120 days of inaction.
- Forward look: Acting FDIC Chair Travis Hill says the agency will continue to issue implementing regulations, including forthcoming capital and liquidity standards for stablecoin issuance.
The Federal Deposit Insurance Corp. board Tuesday approved the issuance of a proposed rule setting the process for FDIC-supervised banks to apply to issue payment stablecoins through subsidiaries under the GENIUS Act.
The proposal would add a new section to Part 303 of the FDIC's rules governing filing procedures, laying out the application criteria for stablecoin issuance. The FDIC could deny an application only if the proposed activity would be manifestly unsafe or unsound. The FDIC would be required to notify applicants whether their applications are deemed substantially complete after 30 days and approved within 120 days. If the agency fails to act after 120 days, applications would be automatically approved.
"Under the proposal, the FDIC would adopt a tailored application process that would enable the FDIC to evaluate the safety and soundness of an applicant's proposed activities based on the statutory factors, while minimizing the regulatory burden on applicants," said acting FDIC Chair Travis Hill, who added the agency would explore providing further regulatory clarity regarding activities related to digital assets and tokenized deposits.
"This proposed rule is the FDIC's first action to implement the GENIUS Act," Hill continued. "In the months ahead, we expect to issue a proposed rule to establish the statutorily mandated capital, liquidity, and risk management requirements for subsidiaries of FDIC-supervised institutions approved to issue payment stablecoins, along with other GENIUS Act-related work streams."
The rule would require banks to submit detailed disclosure requirements disclosing their planned reserves, capital, liquidity, governance, redemption policies, anti-money laundering controls and third-party arrangements, though FDIC says it will rely on existing supervisory information where possible to reduce duplicative paperwork. It also creates a dedicated hearing and appeals process for denied applications and includes a temporary safe harbor allowing early applicants to request waivers of certain GENIUS Act requirements for up to 12 months after the law takes effect.
The board — composed of Hill, Comptroller of the Currency Jonathan Gould and acting Consumer Financial Protection Bureau Director Russell Vought — voted unanimously to issue the proposal. The agency will take comment on the proposal for 60 days following publication in the Federal Register.
At Tuesday's meeting, the FDIC also voted to reduce upcoming special assessments from banks, or what it is charging insured institutions to cover losses from the 2023 failures, something required by law. The agency says the adjustment is meant to keep assessment levels in line with the most recent loss estimate.
FDIC now estimates the cost of regulators' systemic risk exception, invoked to protect uninsured depositors in the failures of Silicon Valley Bank and Signature Bank amount to approximately $16.7 billion as of September 30, 2025, a figure slightly up from the initial $16.3 billion the agency estimated in 2023. If the final costs are higher or lower than expected, the agency would credit banks by adjusting their future deposit insurance fees.
"This interim final rule [would] reduce the rate at which the special assessment will be collected in the eighth collection quarter from 3.36 basis points to 2.97 basis points," the interim final rule noted. "And provide an offset to regular quarterly deposit insurance assessments for banks subject to the special assessment if the amount collected exceeds losses following the resolution of litigation between the FDIC and SVB Financial Trust and again following the termination of the receiverships."
The agency will take comment on the interim final rule for 30 days following publication in the Federal Register, after which time the rule will go into effect.
The agency also proposed reducing the agency's budget by $436.7 million, representing a 16% drop from its 2025 spending levels at the meeting. The largest savings will be in employee compensation, which under the proposal would drop by $324.7 million. The agency reduced its headcount by over 1,300 employees — or 18% of personnel —
"The reduction in staffing was the product of a weeks-long, rigorous review of the FDIC's organizational structure conducted last spring," Hill said. "Through that process, the FDIC identified areas where headcount could be reduced without sacrificing our ability to fulfill our core responsibilities."
