☕ Crypto Newsletter Vol. 124 | Stablecoin Oversight Rules: Federal Reserve Releases Proposed Regulations

Hello, it is time for the “Living with Crypto” newsletter.
Yesterday, we covered the news of record-breaking inflows into Bitcoin ETFs. Today, we look a little further back at a development that did not receive as much flashy coverage. On September 24, the U.S. Federal Reserve (FRB) released proposed regulations for issuers of stablecoins (cryptocurrencies designed to peg their price to specific assets like the U.S. dollar). Who will verify the contents of what supports the “1 dollar = 1 coin” peg, and how will they do it? Today, we will look into that together.

1 | Two proposed rules released by the FRB

On September 24, Eastern Time, the FRB released two proposed rules for banks under its supervision to issue stablecoins, based on the GENIUS Act (a federal law related to stablecoins enacted in July 2025). One defines the contents of the “backing assets (reserves),” such as short-term U.S. Treasury securities, and also outlines capital requirements and risk management standards to prepare for credit and operational risks.
The other defines the procedures for banks to apply for permission to issue stablecoins. The public comment period is set for 60 days from the date of publication in the Federal Register (FRB press release). The GENIUS Act requires four regulatory agencies in total—the FRB, OCC, FDIC, and NCUA—to create rules, and based on the GENIUS Act, the OCC, FDIC, and NCUA have also each released their own proposed rules (official announcements from each agency).

2 | Why is the “content of reserves” being questioned?

Stablecoins are a mechanism that promises “1 coin = 1 dollar,” but what supports that promise is the assets the issuer holds as backing. These proposed rules limit those backing assets to “high-quality, liquid assets such as short-term U.S. Treasury securities” and require issuers to have a system in place that allows users to redeem (convert coins back to dollars) at any time, as well as maintain appropriate capital. If issuers with ambiguous backing proliferate, there is a risk that the “1 dollar” promise could collapse in an emergency. These proposed rules are a step toward translating the framework of the GENIUS Act into concrete supervisory rules.

3 | “Demand for government bonds will increase,” but where did that money come from?

Treasury Secretary Bessent and Senator Hagerty have suggested that the stablecoin market could expand significantly as the regulatory framework is established. Senator Hagerty, citing analysis from the Brookings Institution, introduced the possibility that this could increase demand for (short-term) U.S. Treasury securities by $400 billion to $2.3 trillion by 2030.
However, what we should look at here, rather than the “increase” figure itself, is where that money comes from. According to analysis by the Federal Reserve Bank of Kansas City, if $1 moves from a bank deposit to a stablecoin, holdings of U.S. Treasury securities are estimated to increase by about $0.30 on a net basis, while bank lending is estimated to decrease by about $0.50. In other words, the expansion of stablecoins does not mean that “money increases in the economy as a whole”; the direction of the impact on the economy changes depending on where that money moved from.

Incidentally, the spot price of Bitcoin as of 8:05 PM (Eastern Time) on September 27 was $84,540.11 (approximately 13,294,000 yen when converted at 157.26 yen per dollar, based on the rate as of 6:06 PM UTC on September 27).

🌙 From the perspective of the stars

In the early hours of September 27, we welcomed a full moon in Aries. Mars enters Leo around 11:48 AM (Japan Standard Time) on September 28, and the moon moves into Taurus around 11:40 PM (Japan Standard Time) on the same day.

In astrology, the flow of movement starting from a fire sign and moving to an earth sign is sometimes read as “a time to turn the momentum of having taken the plunge into a grounded form.” For your reference, this coincides with the steady work of institution-building. This is a framework for viewing market psychology, not a prediction of prices.

Summary

The main points today are that the FRB has presented concrete proposed rules regarding “backing assets” for stablecoins, and that the impact cannot be explained solely by the aspect that “demand for government bonds will increase.” When large numbers appear, I want to have the perspective to check where that money came from.

🔎 Let’s check for ourselves today

Let’s check the official website of the issuer of a stablecoin you use or know the name of (USDT, USDC, etc.) to see what assets they explain are backing it.

🌱 A small action you can take today

Choose just one word you heard for the first time today from “reserves,” “redemption,” or “capital,” and write a short note about it in your own words. Not rushing and doing one thing at a time is the secret to keeping it up for a long time.

Thank you for reading to the end again today♪
Look forward to the next “Crypto Newsletter”!

Sources

• Federal Reserve Board “Federal Reserve Board requests public comment on two proposals related to establishing a regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act” (September 24, 2026)

• American Banker “Fed proposes stablecoin rules under GENIUS Act”

• OCC Bulletin 2026-3 “GENIUS Act Regulations: Notice of Proposed Rulemaking” (February 25, 2026)

• FDIC “Notice of Proposed Rulemaking to Establish GENIUS Act Requirements and Standards” (Published in the Federal Register on April 10, 2026)

• NCUA “Comments on the GENIUS Act Proposal Due April 13” and other official announcements

• Federal Reserve Bank of Kansas City “Stablecoins Could Increase Treasury Demand, but Only by Reducing Demand for Other Assets”

• Yahoo Finance (Reuters) “GENIUS Act Could Create $2.3T Treasury Bill Demand As Stablecoins Grow, Says Senator Bill Hagerty” (August 2026)

• CoinDesk Bitcoin Price Page (Observed as of 8:05 PM ET, September 27, 2026)

• Xe.com USD/JPY Exchange Rate (Observed as of 6:06 PM UTC, September 27, 2026, 157.26 JPY)

• Amanjoshi “Astrology Calendar” note (September 2026) / lunaf.com & astro-seek.com Moon phase data

• cafeastrology.com “Mars enters Leo 2026” (September 27, 2026, 10:49 PM EDT)