The Federal Reserve Board on September 24, 2026 requested comment on two proposals that would set its GENIUS Act stablecoin rules. The first covers reserves, capital, custody and risk management for the payment stablecoin issuers the Fed supervises. The second sets how state member banks apply to issue stablecoins through a subsidiary. Comments close 60 days after the proposals appear in the Federal Register.

What the proposals say

The rules would apply to “Board-supervised” issuers. According to the Board staff memo, these are subsidiaries of insured state member banks that the Board approves to issue payment stablecoins, and state-qualified issuers that are uninsured state-chartered depository institutions with $10 billion or more in outstanding stablecoins that move to the Board’s framework.

  • Reserves. Segregated reserves must at all times be worth at least the par value of outstanding stablecoins. Eligible assets include dollar cash, Federal Reserve Bank balances, demand deposits at insured banks, Treasuries maturing in 93 days or less, Treasury-backed overnight repo and reverse repo, eligible funds and tokenized versions of some of these.
  • Shortfalls. An issuer below one-to-one backing must notify the Fed, then liquidate and redeem unless the Board directs it to follow a plan to restore backing.
  • Redemption. Issuers must publish a redemption policy with a redemption period of no more than two business days, unless a safe harbor applies.
  • Capital. A 2% charge applies to reserves held as uninsured deposits or undercollateralized reverse repos. An operational risk charge is 2.0% of the first $20 billion of stablecoins outstanding, 1.5% of the next $30 billion and 1.0% above $50 billion, plus 25% of the three-year average of non-reserve revenue. If a shortfall at one quarter-end persists at the next, the issuer must liquidate reserves and redeem.
  • Yield. The statutory ban on paying interest or yield for holding a stablecoin is implemented. Certain third-party arrangements would be presumed to be prohibited yield, consistent with the OCC’s approach.
  • Reporting. Issuers would file confidential weekly reports on issuance, redemptions and reserves, plus quarterly financial reports.
  • AML enforcement. A Bank Secrecy Act or anti-money laundering deficiency would have to be “significant or systemic” before the Board takes supervisory or enforcement action against an issuer.

The first proposal also sets custody rules for firms that hold reserves or issuing keys, and applies the GENIUS Act’s tying ban to all issuers, including those the Fed does not supervise.

Under the second proposal, a bank would apply by letter with a business plan, financial information, policies, capital structure details, biographical reports and certifications. The proposal also sets a process for appeals, hearings and final decisions.

Governor Michael S. Barr supported the proposals. “Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions,” he wrote. He added that he is concerned the “significant or systemic” standard “may have unknown effects on the Board’s ability to effectively substantiate that an institution establishes and maintains compliant programs.”

What it changes for fintechs and banks

The memo lists earlier GENIUS Act proposals from the FDIC, the NCUA, the OCC and Treasury. A fintech that plans a stablecoin through a state member bank now has a draft of the reserve, capital and reporting terms that bank would face.

Two points matter for partner programs. Third-party arrangements that pass yield to holders would be presumed prohibited. The tying ban would bar an issuer from conditioning its services on a customer buying another product from it. Our sponsor banks directory lists which banks work with fintechs and who supervises them. Earlier this month the OCC’s conditional charter for OpenReserve noted its plan for a stablecoin-issuing subsidiary.

What to watch next

  • Federal Register publication, which starts the 60-day comment period.
  • January 18, 2027, the GENIUS Act’s effective date, or 120 days after the regulators issue final rules if that comes first, per the memo.
  • Final rules from the OCC, the FDIC, the NCUA and Treasury on their own proposals.