The U.S. Federal Reserve on September 24, 2026 proposed its first set of rules for payment stablecoin issuers under its supervision, releasing two notices of proposed rulemaking to begin implementing the GENIUS Act. The central bank opened a 60-day public comment period that runs once the proposals are published in the Federal Register.
Background: from the GENIUS Act to Fed rulemaking
The proposals are the central bank’s first move to translate the GENIUS Act into day-to-day supervision. PYMNTS has reported the law was signed in July 2025 and requires dollar stablecoins to be backed one-to-one with a short list of low-risk assets while barring issuers from paying yield or interest on the tokens themselves. Crowdfund Insider described the statute as an effort to “bring dollar-linked tokens under a consistent national regime.” Until now the Fed had set out the framework only at a high level; the two notices of proposed rulemaking are the first time it has specified the reserve, capital and application requirements that issuers under its supervision would actually have to meet. The rules apply only to institutions the Federal Reserve already oversees, not to every stablecoin issuer in the market.
What did the Federal Reserve propose?
According to Crowdfund Insider and PYMNTS, the Board of Governors issued two notices of proposed rulemaking. The first would require Board-supervised payment stablecoin issuers to fully back their tokens with permissible reserve assets and would set standardized capital requirements, risk-management expectations and rules for the safekeeping of reserves. The second would create a tailored application process for insured state member banks seeking approval for a subsidiary to issue payment stablecoins, along with procedures for determinations and appeals.
Together, the two packages set out both the ongoing financial requirements an issuer would have to meet and the gateway banks would have to pass through before launching a stablecoin business through a subsidiary. The proposals apply to issuers and institutions that the Federal Reserve already supervises, rather than to every stablecoin issuer in the market.
What backing would issuers need?
Crowdfund Insider reported that the first proposal would require an issuer to “keep its tokens fully matched, at all times, by a pool of allowed reserve assets,” with holdings “limited to highly liquid instruments, such as short-dated Treasury bills.” The draft also imposes “uniform capital standards” covering credit and operational risks, according to the same report, and sets out expectations for how reserve assets are held in custody.
PYMNTS described the first proposal as establishing “financial foundation” requirements, mandating full backing with “certain permissible reserve assets,” standardized capital, risk-management standards and asset-safekeeping rules. The emphasis on highly liquid, short-dated government securities is intended to ensure issuers can meet redemptions even under stress.
How does this connect to the GENIUS Act?
The proposals implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, which PYMNTS noted was signed into law in July 2025. The statute already requires dollar stablecoins to be backed one-to-one with a short list of low-risk assets and bans paying yield on the tokens themselves. The Fed’s rulemaking is intended to turn that framework from statute into enforceable supervision for the issuers it oversees.
That interest-and-yield ban has been one of the more consequential elements of the law for the industry, because it limits how issuers and their partners can share reserve income with token holders. The Fed’s proposals operate within those statutory limits rather than setting them.
What did officials say?
PYMNTS reported that Federal Reserve Governor Michael S. Barr highlighted the value of “public input on the proposal’s provisions for reserve asset limitations and capital requirements,” particularly on whether the rules adequately address interest-rate and foreign-currency risks. The request for comment signals that the central bank views the treatment of reserve assets and capital as among the most debatable parts of the framework.
Who else is writing stablecoin rules?
The Federal Reserve is not acting alone. According to PYMNTS, the Treasury Department and the Office of the Comptroller of the Currency are also developing implementation rules under the GENIUS Act, part of a broader effort to build a consistent national regime for dollar-linked tokens. The parallel work across agencies reflects the fact that stablecoin issuers can sit under different supervisors depending on how they are structured.
What are the next steps?
Both proposals are subject to a 60-day comment period following their publication in the Federal Register, after which the Fed will weigh feedback before finalizing any requirements. The timing of final rules was not specified in the reporting reviewed for this article, and the proposals could change in response to industry and public comment.
Why it matters
The treatment of reserves is central to whether holders can reliably redeem a stablecoin for dollars. By limiting permissible reserves to “highly liquid instruments, such as short-dated Treasury bills,” as Crowdfund Insider put it, and layering on uniform capital standards for credit and operational risks, the Fed is aiming to ensure issuers can meet redemptions even under stressed conditions. Governor Barr, quoted by Crowdfund Insider, stressed that “redemption rights must be unmistakable if holders are to trust that they can convert tokens back into dollars even in stressed markets.” For banks, the second proposal sets the gateway — business plans, governance and capital details — they would have to clear before issuing a payment stablecoin through a subsidiary, which will shape how traditional banks participate in the market.
What to watch next
The nearest concrete trigger is the 60-day public comment period, which begins once each proposal is published in the Federal Register; the Fed will weigh that feedback before finalizing any requirements. Barr specifically invited comment on the “reserve asset limitations and capital requirements” and on whether the rules adequately address interest-rate and foreign-currency risks, signaling the most contested provisions. Beyond the Fed, PYMNTS reported that the Office of the Comptroller of the Currency has indicated it aims to issue a final rule by November 2026, and that the Treasury Department has sought comment on licensing frameworks for issuers — parallel efforts worth tracking because an issuer’s supervisor depends on how it is structured. The timing of the Fed’s own final rules was not specified in the reporting reviewed here.
Sources
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Elena Petrova is STnews's Regulation Correspondent, reporting on MiCA, SEC and CFTC actions, the FATF travel rule and AML/KYC developments across digital-asset markets. Her coverage adheres to STnews's editorial standards — primary-sourced, cited, and non-advisory.
Conflicts of interest
I have no current legal practice or retainer relationships with any cryptocurrency company. Past employment relationships are listed publicly.
