The Federal Deposit Insurance Corporation (FDIC) has proposed new regulations that detail the terms under which US banks and their fintech subsidiaries can participate in stablecoin activities, as the use of digital assets within the banking sector expands.
These guidelines, open for public consultation, cover aspects such as reserve asset management, redemption procedures for stablecoins, allowable operations, and capital standards.
Background on Digital Assets
The FDIC chair introduced these measures during a recent board meeting in Washington. They highlighted the swift advancement of digital assets, financial institutions’ technological progress, and the current administration’s support for cryptocurrencies as key drivers behind the growth in stablecoin and tokenized deposit products.
The proposal is part of a coordinated effort among multiple agencies including the FDIC, Office of the Comptroller of the Currency (OCC), and the Federal Reserve. This follows the implementation of the Genius Act, which mandates that stablecoin issuers must register officially and maintain reserves equivalent to their issued tokens.
In December 2024, the FDIC initiated a framework allowing banks to apply for permission to issue payment-stablecoins through subsidiary operations. The OCC then introduced its own measures in February 2025. This proposal aims to reconfirm via regulation that tokenized deposits are subject to federal deposit insurance under the Federal Deposit Insurance Act, as indicated by remarks from the FDIC chair.
The agency has included 144 specific questions for public feedback, exploring issues like permissible and prohibited activities, capital requirements for stablecoin issuers and their parent companies, pass-through insurance approaches, and the prohibition on yield-bearing stablecoins.
Industry and Prudential Considerations
This proposal comes at a time when tensions persist between traditional banking institutions and crypto firms regarding regulatory oversight. The framework is anticipated to be favorably received by the industry, as it provides clearer pathways for regulatory compliance. Meanwhile, banks will analyze the details carefully to ensure fintech companies do not operate in ways that compete with conventional lending activities.
Regulatory concerns around prudential matters remain significant. A Federal Reserve official previously warned regulators about monitoring risks related to money laundering and financial stability as stablecoin regulations develop. The public comment period on the FDIC proposal will offer additional opportunities for these concerns to be formally addressed.
