U.S. stablecoin regulation just took a major step forward.
The Federal Deposit Insurance Corp. has released a proposed rule that explains how banks can legally issue payment stablecoins through subsidiaries. This move advances the rollout of the GENIUS Act, the landmark stablecoin law signed in July. The 38 page framework officially entered public consultation on Tuesday, giving the industry its first real look at how compliance will work in practice.
For banks, this is not a shortcut. It is a detailed process.
Under the proposal, banks would need to submit formal applications outlining subsidiary structures, intended stablecoin activities, and extensive financial documentation. That includes engagement letters from registered accounting firms, signaling that transparency and audit readiness are non negotiable.
The FDIC would review both the stablecoin issuing subsidiary and the parent bank. The focus is clear. Safety and soundness come first.
Once approved, these subsidiaries would fall under FDIC supervision as the primary federal regulator for stablecoin operations. The agency would assess multiple factors, including the issuer’s ability to meet issuance standards, overall financial health, management quality, and, critically, redemption policies.
That last point matters more than ever.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act establishes a strict federal rulebook. Payment stablecoins must be backed one to one by U.S. dollars or approved high quality liquid assets. No leverage. No creative accounting. Just reserves that can be redeemed on demand.
And this is only the beginning.
Acting FDIC Chair Travis Hill told lawmakers earlier this month that additional rules are coming. Capital requirements, liquidity standards, and risk management guidelines are expected to follow in the months ahead. This proposal represents the first regulatory implementation of the GENIUS Act, not the final word.
The political backdrop is just as notable.
President Donald Trump signed the GENIUS Act into law on July 18, following Senate passage in June. The White House ceremony drew top executives from Coinbase, Circle, Robinhood, and Gemini, underscoring how closely the crypto industry is watching Washington.
Treasury Secretary Scott Bessent has framed the law as a strategic tool. In his view, stablecoins can help extend dollar liquidity globally through modern digital infrastructure. That narrative is gaining traction as total stablecoin supply now exceeds $300 billion worldwide, with dollar pegged tokens dominating the market.
The FDIC itself is evolving.
In recent months, the agency has expanded its role in digital asset supervision and reconsidered reputational risk standards that previously discouraged banks from working with crypto firms. This proposed rule reflects that shift, aiming to unlock innovation while still protecting depositors.
For banks and stablecoin issuers alike, the message is clear. Regulation is here, and it is finally taking shape.
