Federal Reserve proposes reserve and capital rules for payment stablecoin issuers under the GENIUS Act

The Federal Reserve Board has asked for public comment on two proposals that would set the rulebook for payment stablecoin issuers it supervises under the GENIUS Act. For high-risk payment players, the important part is not the headline language about “frameworks” — it is the combination of reserve assets, capital requirements, safekeeping rules and application procedures that will shape who can issue, hold and settle these instruments in the U.S. market.

1. The Fed said in a Thursday, Sept. 24 press release that it released two notices of proposed rulemaking and will accept comments for 60 days after publication in the Federal Register. One proposal would require board-supervised payment stablecoin issuers to fully back their stablecoins with certain permissible reserve assets.
2. That first proposal would also establish standardized capital requirements to address credit and operational risks tied to payment stablecoin activities, set risk management standards, introduce rules for board-supervised firms that safekeep the assets backing payment stablecoins and clarify the permissibility of stablecoin and related activities for board-supervised banks.
3. The second proposal would create a tailored application process for board-supervised banks seeking to issue payment stablecoins, along with a process for appeals, hearings and final determinations for those applications.
4. The publication of both proposals was approved in unanimous board votes. Federal Reserve Board Governor Michael S. Barr said the public comment process would be useful for reviewing reserve asset limitations and capital requirements, and for assessing whether the rule adequately addresses interest rate and foreign currency risks. He also said: “While the board’s proposal is an important step in GENIUS Act implementation, further work will undoubtedly be required if stablecoins are to be reliable payment instruments.”
5. The move follows the signing of the GENIUS Act into law by President Donald Trump in July 2025, which PYMNTS described as the country’s first-ever piece of crypto legislation. Other federal agencies are also moving. Comptroller of the Currency Jonathan V. Gould said in August that the Office of the Comptroller of the Currency will have a final rule implementing the GENIUS Act out by November, while the Treasury Department said in August that it was seeking comment on when a payment stablecoin issuer needs a GENIUS Act license and when and how payment stablecoins can be offered and sold in U.S. markets.