On September 24, 2026, the Federal Reserve Board requested public comment on two proposed rules implementing the Fed’s responsibilities under the GENIUS Act, establishing a regulatory framework for Board-supervised payment stablecoin issuers. The GENIUS Act, enacted in July 2025, established the first federal regulatory framework for dollar-backed cryptocurrency tokens known as stablecoins. For banks and bank holding companies evaluating whether to enter the stablecoin market, the proposals may be among the clearest signals yet of the operational, capital, and application requirements they could face.
What the Proposals Would Do
1. Substantive requirements for issuing and safekeeping stablecoins
The first proposal would require Board-supervised payment stablecoin issuers to fully back their tokens with certain reserve assets, such as short-term Treasury bills. More specifically, issuers would need to hold permissible reserve assets (e.g., short-term Treasury bills or certain other high-quality, liquid assets) on a fully-backed basis, and the proposal would establish standardized capital requirements addressing credit and operational risks associated with payment stablecoin activities, along with related risk-management standards. The proposal would also introduce guidelines for Fed-supervised banks that custody reserve assets on behalf of stablecoin issuers. Separately, it clarifies which stablecoin and related activities are permissible for Board-supervised banks to engage in.
2. A tailored application process for banks seeking to issue their own stablecoins
The proposal would establish a tailored application process for banks that want to issue their own stablecoins, alongside an outline of the stablecoin-related activities that Fed-supervised banks can engage in. Applicant banks would be required to submit a business plan and financial information, among other documents. The proposal would also create a process governing appeals, hearings, and final determinations on applications.
Timing
The Fed will accept public comment on both proposals for 60 days following their publication in the Federal Register.
Related Development: State Licensing Pathway Advancing at Treasury
Separately, the state-level licensing track under the GENIUS Act is also moving forward. The GENIUS Act, signed into law in July 2025, provides pathways for stablecoin issuers to be overseen by either state or federal regulators. A nonbank issuer with a payment stablecoin whose consolidated outstanding issuance does not exceed $10 billion may instead seek oversight under a qualifying state regime; issuers above that threshold, and issuers that do not opt for (or no longer qualify for) state oversight, fall under the primary federal regulators designated by the GENIUS Act, principally the Office of the Comptroller of the Currency for nonbank issuers.
A state regime seeking this treatment must be deemed “substantially similar” to the federal framework by the Stablecoin Certification Review Committee, a panel that includes the leaders from the Treasury, the Federal Reserve Board, and the FDIC. The Treasury proposed a set of principles in April 2026 to ensure state regimes match or exceed the federal framework, directing states to adhere closely to the OCC’s rules for stablecoin issuers. States have notably pushed back on the proposal, urging the Treasury to reduce its reliance on OCC standards.
On October 1, 2026, the Treasury Department issued the forms and procedures states will use to submit their stablecoin oversight frameworks for approval as an interim final rule. The rule took effect immediately but invites feedback for future revisions. The Treasury Department has not yet finalized the “broad-based principles” the Stablecoin Certification Review Committee will use to judge whether a state regime is substantially similar to the federal framework; that remains governed by the April 2026 proposal referenced above, to which states responded in June 2026 comments urging the Treasury to look beyond the OCC’s (not yet finalized) standards.
Institutions weighing a state-chartered path (generally relevant to smaller issuers under the $10 billion threshold) should watch this area closely. The interim final rule establishes the timeline and submission mechanics for state certification, but the underlying “substantially similar” standard, including how closely state regimes must mirror OCC standards, remains unresolved, which affects whether a state charter offers a meaningfully different compliance burden than direct federal oversight.
Certification deadline and built-in flexibility. The GENIUS Act requires states to submit their initial certification within one year of the law’s effective date, setting a January 2028 deadline for states to submit their stablecoin oversight frameworks. Treasury received considerable feedback, including from lawmakers who backed the bill, raising concerns that states might struggle to develop and implement adequate regimes in time. To address this, the interim final rule provides that a state satisfies the deadline by submitting any kind of certification by January 2028, even if the certification is conditional on additional planned state legislative or regulatory work or would otherwise be considered incomplete under the procedures, so long as the state can demonstrate it is moving expeditiously toward a regime that meets or exceeds the federal standards.
Review process and required showings. Treasury will render a decision only once a state’s submission package is complete, and any denial carries a 180-day period for the state to cure deficiencies and resubmit. To obtain approval, a state must attest that its regime is substantially similar to each category of federal requirements for stablecoin issuers, with supporting information on reserves, redemption, capital, liquidity, risk management, audits, and sanctions compliance, among other categories.
Ongoing recertification. States must recertify their regimes annually and disclose any “material change” since the prior certification, defined broadly to include legislative, regulatory, supervisory, judicial, or other updates reasonably expected to materially affect the state’s stablecoin regime (for example, changes to a state regulator’s supervisory or enforcement authority, prudential standards, or permissible issuer activities, or revisions that convert binding requirements into mere best practices or relax capital or reserve diversification requirements).
What remains open. Treasury has not yet finalized the broad-based “substantially similar” principles themselves; those remain governed by the April 2026 proposal, which directed states to closely track the OCC’s (also not yet finalized) stablecoin issuer standards. The interim final rule invites further comment on several open issues, including the clarity of certain definitions and the consequences of a recertification denial.
What This Means for Banks Considering Issuing Stablecoins
For institutions weighing whether to enter this space, a few practical takeaways stand out:
- Reserve composition matters early. Because the proposal ties permissible reserves to short-term Treasury bills and other high-quality, liquid assets, banks may wish to begin assessing balance-sheet and treasury implications of holding a fully-backed reserve pool well before any application is filed.
- Capital and risk management build-out. The standardized capital requirements and risk management standards mean prospective issuers will need to develop (or adapt existing) frameworks specifically calibrated to credit and operational risks of stablecoin activities, not simply rely on general bank capital frameworks.
- Custody arrangements need scrutiny. Banks that plan to custody reserve assets for stablecoin issuers — whether their own or third parties’ — should watch for the forthcoming custody guidelines, which will shape any custodial services offering.
- Application readiness. Banks interested in issuing stablecoins directly may want to begin assembling the business plan and financial information the application process will require, and should factor in that the process includes potential appeals and hearings on adverse determinations.
- Comment window is a strategic opportunity. With a 60-day comment period from Federal Register publication, banks have a limited but meaningful window to weigh in on reserve asset definitions, capital calibration, and application procedures before the rules are finalized.
- Mind the certification deadline, even if your state’s regime is still developing. The GENIUS Act requires states to submit an initial certification of their stablecoin regimes within one year of the law’s effective date, setting a January 2028 deadline. The interim final rule allows a state to satisfy that deadline with a certification that is conditional on additional planned legislative or regulatory work, or that would otherwise be considered incomplete, provided the state can show it is moving expeditiously toward a compliant regime.
Banks and bank holding companies considering a stablecoin offering may need to work through a layered set of reserve, capital, custody, and application requirements, and early preparation could help reduce regulatory risk. Key areas where outside counsel may add value include conducting gap analyses of existing balance-sheet and custody capabilities against the proposed reserve and safekeeping standards, developing capital and risk-management frameworks calibrated specifically to stablecoin activities, and assembling the business plans, financial disclosures, and supporting documentation the application process will require. Institutions may also want to consider the possibility of appeals and hearings following an adverse determination. The 60-day comment window, once the proposals are published in the Federal Register, offers an opportunity to weigh in on the final rules regarding reserve-asset definitions, capital calibration, and application timelines, and well-crafted comment letters can help translate operational concerns into regulatory input.
If you have questions about these proposed rules, contact Jeff Le Riche, Sarah Razaq Sallis, Kip Randall, or Max Earp-Thomas.
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