Federal Reserve Sets Out New Stablecoin Framework Under GENIUS Act

Highlights:

• The Federal Reserve has proposed new rules for payment stablecoin issuers supervised by the Board under the GENIUS Act.
• The framework covers reserve assets, capital requirements, risk controls and the approval process for stablecoin issuers.
• Fed Governor Michael Barr supports the proposal but wants stronger redemption protections and more clarity on anti-money laundering rules.

The U.S. Federal Reserve has proposed a new regulatory framework for payment stablecoin issuers under the GENIUS Act, outlining how firms would need to manage reserves, capital, risks and regulatory approvals. The Federal Reserve announced the proposals on September 24 and opened them for public comment. In a separate statement, Fed Governor Michael Barr backed the move but said strong safeguards will be essential if stablecoins are expected to work as reliable payment instruments.

@federalreserve requests public comment on two proposals related to establishing a regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act: https://t.co/WD0OsCS9cS

— Federal Reserve (@federalreserve) September 24, 2026

Fed Stablecoin Rules Would Require Fully Backed Reserves

Under the first proposal, payment stablecoin issuers supervised by the Federal Reserve would have to fully back their tokens with permitted reserve assets. These reserves could include short-term U.S. Treasury bills and other high-quality, liquid assets.

The Fed is also proposing standardized capital requirements to help issuers manage credit and operational risks tied to stablecoin activities. Issuers would also need to meet broader risk-management standards. Separate requirements would apply to Board-supervised companies responsible for safeguarding the assets backing stablecoins.

The proposal also seeks to clarify which stablecoin activities Federal Reserve-supervised banks would be allowed to conduct. Barr welcomed the limits on reserve assets and the move toward clear, standardized capital requirements. However, he said the Fed should use public feedback to determine whether the framework provides enough protection against risks linked to interest rates and foreign currencies.

Stablecoin Issuers Would Face New Approval Process

A second proposal focuses on the approval process for Board-supervised banks that want to issue payment stablecoins. Banks applying to enter the market would need to submit information about their business model, financial position and planned stablecoin operations. The framework would also set out procedures for appeals, hearings and final regulatory decisions.

The Federal Reserve said comments will be accepted for 60 days after the proposals are published in the Federal Register. Barr said redemption rights should also receive close attention before the rules are finalized. In his view, stablecoins must remain redeemable at par even when markets are under stress, or an issuer faces financial pressure. That protection could become especially important if stablecoins grow into a widely used payment method.

Barr Questions Anti-Money Laundering Provision

Barr also raised concerns about one part of the proposed anti-money laundering framework. He pointed to language that could limit supervisory or enforcement action over an anti-money laundering deficiency unless the issue is considered “significant or systemic.”

According to Barr, it is still unclear how that standard could affect the Federal Reserve’s ability to decide whether regulated institutions are maintaining compliant anti-money laundering programs. He raised a similar concern over a separate bank anti-money laundering proposal issued by the Board in July.

Barr nevertheless described the latest proposals as an important step toward implementing the GENIUS Act. He said further work on safeguards, redemption protections and regulatory standards will be needed as the Federal Reserve develops its final stablecoin rules.