The U.S. Federal Reserve proposed two rules Thursday to implement the bulk of its obligations under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, advancing the legal framework for oversight of stablecoin issuers and setting procedures for federally regulated banks to issue their own tokens.
Both proposals now open for a 60-day public comment period before the Fed can finalize them—a process that typically takes several months or longer.
The first proposal establishes capital and reserve requirements designed to ensure stablecoins are fully backed by the most liquid assets and that issuers maintain a solid foundation during periods of stress. It also outlines permissible stablecoin activities at supervised banks and contains the rules governing so-called stablecoin rewards.
On rewards, the Fed said its approach closely mirrors a parallel proposal from the Office of the Comptroller of the Currency, both seeking to constrain how crypto platforms can incentivize holdings. "Under the proposal, certain types of arrangements involving third parties would be presumed to be prohibited payments of interest or yield," the Fed wrote, noting consistency with the OCC's stance. While the regulations remain preliminary, the agencies appear to permit only a narrow path for platforms such as Coinbase to offer stablecoin rewards comparable to credit-card incentive programs.
The question of how generously companies can reward stablecoin users was a key sticking point in the debate over the recently failed Digital Asset Market Clarity Act. With that legislation unsuccessful, the GENIUS Act remains the primary statute governing stablecoin rewards.
The second proposal sets out the procedural requirements for a regulated bank to begin issuing a stablecoin, including submission of a business plan, financial information and relevant policies and procedures.
"Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions," said Fed Governor Michael Barr, who led the Fed's supervision program prior to the Trump administration. "This includes during market stress, when pressure can be put on the value of even otherwise liquid government debt, and during episodes of strain on the individual issuer or its related entities."
The GENIUS Act, enacted last year, required federal banking regulators and the Treasury Department to put implementing regulations in place by July 2026—an already-lapsed deadline. Other agencies have advanced their own rules in recent months. Last month, the Treasury proposed federal definitions clarifying what constitutes issuance of a U.S. stablecoin and who must comply. The FDIC began its rulemaking in December, and in June multiple agencies jointly proposed that stablecoin issuers adopt customer-identification procedures similar to those required of other regulated financial firms.
