The Fed Just Proposed New Rules for Stablecoins Under the GENIUS Act

What the Fed Just Proposed

The Federal Reserve dropped two new proposals this week aimed at bringing some order to the stablecoin world, and they're both tied to the GENIUS Act passed earlier this year.

The first rule would require full reserve backing for any payment stablecoin, meaning issuers need to hold cash or short-term Treasuries equal to every coin in circulation. No fractional reserves, no funny business.

Banks Want In Too

The second proposal sets up an actual application process for banks that want to issue their own stablecoins through subsidiaries. Basically, if a bank wants to launch something like a "BankCoin," it now has a clear path to ask permission instead of guessing what regulators want.

This matters because it signals the Fed is trying to bring stablecoins into the same kind of oversight banks already deal with, rather than leaving it to a patchwork of state rules. Expect more banks to start exploring stablecoin products once this framework is finalized.