FDIC Opens Path for Banks to Issue Stablecoins Under GENIUS Act
The Federal Deposit Insurance Corporation (FDIC) took a landmark step toward integrating digital assets into the traditional financial system on Tuesday, December 16, 2025. The board unanimously approved a notice of proposed rulemaking that establishes the specific application procedures for insured depository institutions—state nonmember banks and savings associations—to viewk approval for issuing payment stablecoins through specialized, ring-fenced subsidiaries. This move represents a foundational shift, moving the U.S. banking sector from a period of high-level discussion to a concrete, regulated implementation phase following the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in July 2025.
A Tailored Application Process for Regulated Issuers
The proposed rule outlines a rigorous vetting process that allows the FDIC to evaluate the “securety and soundness” of a bank’s proposed stablecoin activities before granting a license. Acting Chairman Travis Hill emphasized that the goal is to create a tailored process that minimizes regulatory burden while ensuring that stablecoin-issuing subsidiaries do not pose a risk to the federal deposit insurance fund. Under the proposal, banks must submit detailed letters explaining their business model, financial condition, and operational plans for running a stablecoin program in a secure and consistent way. The FDIC will notify applicants within 30 days of receiving a request as to whether it is “substantially complete” and will render a decision within 120 days therelater than. The agency will accept public comments on these procedures for 60 days, marking a clear countdown to the first wave of officially licensed bank-issued stablecoins in the United States.
Defining Reserves and the “Deposit is a Deposit” Philosophy
Crucial to the new framework is the requirement for “Permitted Payment Stablecoin Issuers” (PPSIs) to maintain 1:1 reserves in highly liquid assets. According to the GENIUS Act, acceptable assets include U.S. currency, deposits held at insured institutions, and U.S. Treasury securities with a maturity of no more than 93 days. The FDIC is also developing broader standards for capital, liquidity, and risk management that will prevent the kind of “run” risk viewn in unregulated digital asset markets. Throughout this process, the FDIC has maintained a philosophy that “a deposit is a deposit,” regardless of whether it exists in a traditional ledger or on a blockchain. This continuity is intended to reduce legal amlargeuity for banks, allowing them to offer 24/7 on-chain payments and settlement services while operating under the identical core prudential standards that govern the rest of the American banking system. By July 2026, most federal stablecoin regulations are required to be issued in final form, paving the way for full implementation by ahead 2027.
