FDIC Proposes Stablecoin Rules—What Financial Institutions Need to Know

By Spencer Hathaway April 13, 2026

As onlookers had been anticipating since the passing of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, on April 7, 2026, the Federal Deposit Insurance Corporation (FDIC) approved publication of a Notice of Proposed Rulemaking (NPR) to implement key provisions of the GENIUS Act.

For community banks exploring whether—and how— to participate in the digital asset ecosystem, the proposal offers important regulatory clarity.

Who the Proposed Rules Cover

The proposed framework applies where the FDIC serves as the primary federal payment stablecoin regulator—specifically:

• Stablecoin issuers that are subsidiaries of FDIC‑supervised insured depository institutions, and
• FDIC‑supervised banks acting as custodians for stablecoin reserves, tokens, or related assets.

Permitted Activities—and Clear Boundaries

The proposal narrowly defines a payment stablecoin issuer’s core activities:

• Issuing and redeeming payment stablecoins
• Managing reserve assets
• Providing limited custody or safekeeping services

Activities supporting these functions may be permitted, while others would require explicit FDIC approval.

Just as notable are the prohibitions:

• Crucially for many stakeholders, no interest or yield may be paid on payment stablecoins. The proposal seemingly also seeks to close loopholes where yield is disguised as a reward through an arrangement with a third party.  There is continued concern among experts and industry groups, however, that the proposed rule does not go far enough in this regard.
• Reserve assets generally may not be reused, rehypothecated, or pledged, with limited exceptions.
• Issuers may not extend credit to customers to purchase stablecoins.

Reserves, Custody, and Capital

The proposal details expectations for:

• Reserve composition, reporting frequency, and audits
• Custody requirements, including segregation of assets (including private keys) and protection from a custodian’s creditors
• Capital standards, including minimum capital during a three‑year de novo period, ongoing risk‑based requirements, and a separate “operational backstop” consisting of highly liquid assets

Key Clarifications for Insured Banks

Though not unexpected, two points are especially relevant:

• Stablecoin reserve deposits are not pass‑through insured to stablecoin holders; they are insured as corporate deposits of the issuing entity.
• Tokenized deposits are not a new deposit category—deposit insurance remains technology‑neutral and turns on the statutory definition of a “deposit,” not how it is recorded.

Your Voice Matters

The above summary only scratches the surface of the full contents of the proposal. Whether your institution is actively pursuing sponsoring or owning a stablecoin‑issuing subsidiary, acting as a custodian for stablecoin reserves or other digital assets, tokenizing deposits on blockchain-based payment rails or simply patiently observing from the sidelines, now is the opportunity to weigh in. The FDIC has opened a 60‑day public comment period, and community banks can play a critical role in shaping practical, workable final rules.

You can access the FDIC’s press release and financial institution letter by following the links.

If you have any questions about the GENIUS Act or other digital considerations for the banking industry, please contact Spencer Hathaway or your BNN advisor.