Federal Reserve Proposes GENIUS Act Rules For Stablecoin Issuers

TLDR

The Federal Reserve proposed two new rules on Thursday to help carry out the GENIUS Act.
One rule sets capital and reserve requirements for stablecoin issuers.
The other rule creates an application process for banks that want to issue stablecoins.
Fed Governor Michael Barr supported the plan but wants stronger anti-money laundering standards.
Both proposals are open for public comment for 60 days before becoming final.

The Federal Reserve has proposed two new rules aimed at putting the GENIUS Act into practice. The announcement came on Thursday.

??BREAKING: The Fed has proposed its GENIUS Act rules, requiring stablecoins it oversees to be fully backed by Treasury bills and other high-quality assets.
Proposal one:
– Stablecoins must be fully backed by permissible reserves, such as short-term Treasury bills and other… pic.twitter.com/UJohJhvefA
— Coin Bureau (@coinbureau) September 24, 2026

The GENIUS Act is a federal law signed last year by President Donald Trump. It set up rules for how stablecoins should work in the United States.
Stablecoins are digital tokens meant to hold a steady value, usually tied to the U.S. dollar. The law requires issuers to back these tokens with safe, liquid assets.
What The New Rules Say
The first proposal focuses on reserves and capital. It would require stablecoin issuers to back their tokens fully with short term Treasury bills or similar liquid assets.
It also sets standardized capital requirements. These rules are meant to help issuers stay stable during times of market stress.
The proposal also addresses stablecoin rewards. Under the plan, most arrangements involving third parties that pay yield or interest would be treated as banned.

This mirrors language already used by the Office of the Comptroller of the Currency. The two agencies appear to be taking a similar approach on this issue.
The second proposal lays out how a bank supervised by the Fed could apply to issue its own stablecoin. Banks would need to submit a business plan, financial details, and internal policies.
Concerns From Fed Governor Barr
Fed Governor Michael Barr said he supports the new proposals. However, he raised concerns about how anti-money laundering rules would be enforced.
Barr said he wants a clear standard. He does not want the Fed to take enforcement action unless a problem is described as a serious or ongoing issue.
Barr said he is worried the current wording could create confusion. He said it might affect the Fed’s ability to confirm that a bank has a proper compliance program in place.
Barr previously ran the Fed’s bank supervision program. He served in that role before the current administration took office.
Both proposals are now open for public comment for 60 days. After that period, the Fed can revise the rules before making them final.
Background On The GENIUS Act
The GENIUS Act originally set a deadline of July 2026 for agencies to finish their rules. That deadline has already passed.
Federal regulators have said the law will take full effect in January 2027. Agencies are still working through the rulemaking process before then.
Other agencies have already taken steps of their own. The Treasury Department proposed its part of the plan last month, covering who must follow the new stablecoin rules.
The Federal Deposit Insurance Corp. began its part of the process back in December. It was the first agency to move forward with GENIUS Act rulemaking.
In June, several agencies jointly proposed rules requiring stablecoin issuers to verify user identities. This would put stablecoin firms under similar rules as other financial companies.
The debate over stablecoin rewards has also connected to a separate bill. The Digital Asset Market Clarity Act had aimed to update parts of the rules but failed to pass.
Because that bill did not succeed, the GENIUS Act remains the main law governing how companies can reward stablecoin holders.