Last week, the FDIC issued a proposed rule in an effort to implement certain provisions of the GENIUS Act (enacted in July 2025) and establish application procedures for FDIC-supervised institutions (State nonmember banks and State savings associations) to issue payment stablecoins through subsidiaries. Full access to the proposed rule can be found here.
Overview of the Proposed Rule
A summary of the proposed rule is outlined below.
Who Can Issue Stablecoins
Only permitted Payment Stablecoin Issuers (PPSIs), including subsidiaries of FDIC-supervised institutions approved by the FDIC.
Application Process
Applicants would be required to submit a letter application to their FDIC regional office describing:
- The proposed payment stablecoin and the subsidiary’s planned activities
- How the subsidiary plans to maintain the stablecoin’s stable value
- Any proposed incidental activities related to payment stablecoin activities or digital asset service provider activities
Additional information required in the application would include planned capital, liquidity, reserves, financial projections for the first three years of operations, policies on custody and redemption, AML/BSA compliance policies, and an engagement letter with a registered public accounting firm.
FDIC Review Timeline
The proposed rule also outlines the FDIC’s review timeline:
- 30 days to confirm application completeness
- 120 days to approve or deny the application
Complete applications for which no “approve or deny” decision is issued within 120 days would be deemed approved. Denied applicants may request a hearing within 30 days, and the FDIC would issue its final determination within 60 days thereafter.
Evaluation Factors for Approval or Denial
Example factors the FDIC would consider when reviewing applications include:
- Ability to meet GENIUS Act requirements (including 1:1 reserve backing and disclosures)
- Management integrity and competence
- Redemption policy and consumer protections
- Compliance with AML, sanctions, and operational risk standards
Next Steps and Public Comment Period
With this proposed rule, the FDIC is seeking public comments on application requirements and burden, the appeal process, additional evaluation factors, cost estimates, and potential impacts.
If you need further guidance or have any questions, please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
