Federal Reserve Proposes Stablecoin Backing Requirements for Supervised Issuers
The Federal Reserve Board has introduced two regulatory proposals under the GENIUS Act aimed at overseeing supervised payment stablecoin issuers. The first proposal requires these issuers to fully back their tokens with permissible reserve assets, such as short-term U.S. Treasury bills and other eligible instruments. This measure is intended to ensure stability and mitigate risks associated with token volatility. The second proposal outlines a tailored process for banks considering the issuance of stablecoins, allowing them to navigate regulatory requirements more effectively while maintaining compliance standards. These proposals reflect growing concerns among regulators about the systemic risk posed by large-scale stablecoin operations in an increasingly digital financial landscape.
Topics: Federal Reserve GENIUS Act payment stablecoin regulations stablecoins