The Federal Reserve proposed two rules on Wednesday that would require payment stablecoin issuers it supervises to hold full reserve backing in highly liquid assets and meet standardized capital requirements, the most concrete step yet toward implementing the GENIUS Act.
The first proposal requires issuers to back their tokens one-to-one with high-quality liquid assets such as short-term Treasury bills. It also sets unified capital and risk management standards, defines how reserve assets must be custodied, and clarifies the licensing scope for Fed-supervised banks that run stablecoin activities.
The second proposal creates a specialized approval process for banks under Fed supervision that want to issue stablecoins, giving the central bank a dedicated pathway rather than case-by-case approvals. Until now, a bank wanting to issue had no standard route, which left would-be entrants waiting on informal conversations with supervisors. A published process changes the calculus for institutions that price regulatory risk before committing engineering budgets.
How the capital charge works
Operational-risk capital scales with the size of the issuer, according to details reported by Gate News. Issuers would hold capital equal to 2 percent of the first $20 billion of tokens outstanding, 1.5 percent of the next $30 billion, and 1 percent above $50 billion. On top of that sits a charge equal to 25 percent of the issuer three-year average revenue from sources other than its reserves.
| Tokens outstanding | Operational-risk capital |
|---|---|
| First $20 billion | 2.0 percent |
| $20 billion to $50 billion | 1.5 percent |
| Above $50 billion | 1.0 percent |
The tiered design rewards scale. A small issuer pays more than twice the capital rate of a giant one on its earliest tokens, which raises the bar for new entrants while letting incumbents spread the cost. Reserve custody rules matter as much as the numbers: issuers will need segregated arrangements that survive an issuer bankruptcy, a detail that has burned crypto firms before. The proposals are open for 60 days of public comment once published in the Federal Register.
Barr backs the package, with a warning
Federal Reserve Governor Michael Barr, who has previously raised concerns about the GENIUS Act, said he supported the proposal but flagged gaps around money laundering controls. He tied the stablecoin package to the Fed July proposal to revise bank AML program requirements, which would focus supervision on significant failures after a bank establishes a program.
I am concerned that the significant or systemic standard may have unknown effects, Barr said in his statement.
His concern lands as regulators broaden compliance duties for stablecoin issuers. The FDIC encouraged applying AML, counter-terrorist-financing and sanctions requirements to issuers earlier this year, according to Cryptopolitan. A separate Fed proposal would also treat permitted issuers as financial institutions under the Bank Secrecy Act and require an effective customer identification program, with comments on that rule due in August.
The regulatory stack fills in
The GENIUS Act, signed by President Trump last year, established the first federal framework for payment stablecoins. Implementation has moved in layers. The Office of the Comptroller of the Currency issued its proposed rule in late February. The FDIC followed in April with prudential requirements for issuers that are subsidiaries of FDIC-supervised banks, covering reserves, redemptions, permissible activities and capital, plus a clarification that tokenized deposits remain deposits under federal law. FDIC Chairman Travis Hill used the April statement to argue that tokenization unlocks more than faster payments, pointing to programmability, atomic settlement and immutability as the real value. Treasury published its own proposed rules on issuance and sale in August.
The Fed package closes the piece for the issuers it directly supervises. Together the rules push issuers toward a common shape: full backing, conservative assets, audited reserves and bank-grade compliance. Divergence between agencies remains the open question. The OCC, FDIC and Fed proposals align on broad strokes but differ on details, and commenters will press for consistency so a single issuer does not face three slightly different rulebooks.
The market the rules will govern is large and concentrated. The stablecoin sector capitalization stood near $292 billion as of Thursday, essentially flat over 24 hours, with Tether and USDC accounting for most of it, per CoinGecko data cited by CoinGabbar. Bitcoin traded near $84,400 and the total crypto market cap sat at $2.97 trillion, little moved by the announcement. Traders appear to have filed the proposal under expected rather than new: the GENIUS Act mandated reserve and capital rules, so the only real suspense was in the calibration.
What it means for issuers and banks
For Circle, Tether US operations and bank entrants, the tiered capital charge is manageable at current scale but adds a real cost that grows with issuance. The custody and asset-limit rules effectively lock issuers into short-duration Treasury paper, deepening the link between stablecoin float and demand for US government debt. Anything that slows issuance growth also slows that Treasury buying channel, which is why the banking lobby and Treasury market analysts watch stablecoin rulemaking as closely as crypto traders do.
Banks get a defined approval path, which should reduce hesitation among regional institutions weighing tokenized deposit products. The 60-day comment window will draw heavy responses on the yield prohibition, pass-through insurance and the AML threshold Barr questioned. How the Fed resolves those three will shape whether the final rule reads as a floor for issuers or a gate. Finalization before the end of the year would let banks plan 2027 product launches with real certainty, which is the timeline several large issuers have been working toward.