FDIC introduces a new rule for stablecoins under the GENIUS Act

On April 7, 2026, the Federal Deposit Insurance Corporation (FDIC) took a significant step to address US digital asset regulation. By approving a new notice of proposed rulemaking (NPR) under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, the FDIC is codifying the standards for how banks and their subsidiaries interact with the growing stablecoin market.

This is the second time major rulemaking has been proposed under the GENIUS Act, following an initiative in December 2025 regarding stablecoin application procedures. This new proposal focuses on operational standards, establishing clear requirements for reserve assets, redemption rights, and capital.

What are the new FDIC rule key pillars?

The proposed rule establishes a regulatory structure for financial institutions reporting to the FDIC across four key areas:

• Reserve asset diversification: To mitigate systemic risk, the FDIC suggests that a permitted payment stablecoin issuer (PPSI) hold no more than 40% of its reserve assets at any single eligible financial institution.

“Proposed § 350.4(f) would require that a PPSI limit its total counterparty exposure to any one eligible financial institution, regardless of type of reserve asset, to no more than 40 percent of its reserve assets, across all brands of payment stablecoins issued by the PPSI. This requirement would limit a PPSI from being overly exposed to or concentrated in a single eligible financial institution.”

• Asset backing and redemption: The rule reinforces the GENIUS Act’s requirement for one-to-one dollar backing and mandates clear redemption rights, making stablecoin nearly as reliable as money market funds.

“A PPSI must maintain identifiable reserves backing the outstanding payment stablecoins of the PPSI on an at least one-to-one basis and specify the required reserve asset types. (…) If one of the PPSI’s payment stablecoins fails to maintain reserves on a one-to-one basis to its outstanding issuance value, in some cases, that may erode market confidence in the PPSI’s other brands of payment stablecoins, even as the PPSI maintains separate required reserves identifiable for each brand of payment stablecoin. Under the proposal, the FDIC would expect, at a minimum, that a PPSI with multiple brands of payment stablecoins maintain separate and segregated pools of reserves for each payment stablecoin to protect against the contagion risk from one payment stablecoin failing.”

• The yield prohibition: In line with the GENIUS Act’s statutory text, the proposal prohibits issuers from paying interest or yield to stablecoin holders. This remains one of the most debated aspects of the framework as the industry weighs the balance between consumer incentive and financial stability.

“Proposed § 350.3(b)(4) would prohibit a PPSI from paying the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin consistent with section 4(a)(11) of the GENIUS Act (12 U.S.C. 5903(a)(11)).”

• Tokenized deposits: The FDIC clarified that tokenized deposits – deposits recorded on a blockchain or distributed ledger – are to be treated exactly like traditional deposits under the Federal Deposit Insurance Act (FDIA).

“The FDI Act’s definition of deposit is technology neutral, and therefore, tokenized forms of deposits are not a separate category of deposits under the statute… A tokenized product that meets the statutory definition of ‘‘deposit’’ is a deposit, and as such, is treated no differently under the FDI Act than other forms of deposits. Accordingly, a depositor using tokenized deposits is afforded the same Federal deposit insurance coverage under the FDI Act as a depositor using non-tokenized deposits.”

What are the GENIUS Act statutory deadlines?

The transition from guidance-based frameworks to the explicit statutory authority of the GENIUS Act marks a new era for digital finance. Firms should align their internal regulatory roadmaps with the following deadlines: 

• May 1, 2026: Deadline for public comments on the OCC’s proposed rulemaking. This is the primary window for industry leaders to shape the practical application of these standards.
• July 18, 2026 (1-year mark): A pivotal deadline for regulators to finalize all pending regulations. This date also marks the deadline for state compliance certifications and the delivery of mandated studies regarding non-payment stablecoins.
• January 18, 2027 (18-month mark): The General Effective Date of the GENIUS Act. By this point, the core legal framework moves from proposed to enforceable law.
• July 18, 2028 (3-year mark): The full compliance deadline for digital asset service providers. This final milestone specifically addresses the sunset period for dealings with unlicensed issuers.

What does this new rule mean for financial institutions?

In short, the FDIC is raising the bar from basic record-keeping to active, high-stakes management, and here’s what it looks like in practice:  

• Real-time oversight is no longer optional: Firms can’t just check books at the end of the day. To meet new diversification and redemption rules, firms need to comb their reserve assets at all times to never exceed the 40% limit.
• Efficiency over costs: The FDIC is now linking how much emergency cash, or capital, firms should hold for operating expenses from the previous year. The more streamlined their operations are, the less capital they are bound to lock away.
• The insurance reality check: The FDIC is clarifying how insurance applies to digital assets, but the type of asset makes a major difference in how a customer is protected: 
  • Tokenized deposits: These are treated as standard bank deposits. Because the FDIC is technology neutral, if it’s a deposit on a blockchain, it’s insured just like a deposit in a savings account.
  • Stablecoin reserves: Unlike tokenized deposits, reserves backing a stablecoin only get pass-through insurance if the issuer meets strict FDIC conditions – like maintaining a 1:1 ratio and keeping individual ownership records. If those conditions aren’t met, the reserves are treated as a single corporate deposit, and individual holders may not be protected. 

To navigate the upcoming FDIC deadlines successfully, firms must prioritize two things: clear transparency with their users and a tech infrastructure capable of managing these high-stakes requirements. Building this foundation now is the only way to stay resilient as the digital asset landscape enters a new regulatory phase.