Fed proposes reserve backing and application rules for payment stablecoins

The Federal Reserve proposed a reserve and risk-management framework for payment-stablecoin issuers within its jurisdiction on September 24, 2026, alongside a separate application rule. Both form part of GENIUS Act implementation.

The first proposal would require full backing with permitted high-quality liquid reserve assets, including Treasury securities. This addresses the relationship between tokens outstanding and the assets supporting them.

The first proposal also covers capital for credit and operational risks, risk management, custody of backing assets and permissible bank activities. Custody concerns how the reserve assets are held and safeguarded. The capital and risk-management provisions address the issuer’s exposures and operations.

The second proposal sets out the information and procedures for applications. It includes business plans and financial information, together with a framework for determinations, appeals and hearings.

Applications would give the regulator information about a business seeking permission to issue stablecoins. The reserve and operating requirements would govern aspects of its activity after authorisation.

Both rules remain under consultation, with comments due 60 days after publication in the Federal Register.

The framework addresses reserve backing and issuer conduct while credit and operational risks remain part of the business.