The Federal Deposit Insurance Corporation voted on April 7, 2026 to approve a new proposed rule. The rule implements core operating standards for payment stablecoins issued by subsidiaries of FDIC-supervised banks. It covers reserve requirements, capital treatment, redemption timelines, and custody standards. This is the second GENIUS Act-related proposal the FDIC has approved, following an earlier application procedures rule from December 2025. Together, these two proposals form the FDIC’s framework for bank-issued stablecoins.
The rule targets FDIC-supervised institutions specifically, including state non-member banks and state-chartered savings associations. Under the proposal, these institutions cannot issue payment stablecoins directly. Instead, they must route issuance through an approved subsidiary. The FDIC designates qualifying subsidiaries as permitted payment stablecoin issuers, or PPSIs. This subsidiary structure limits the risk that stablecoin operations could destabilize the parent bank.
The GENIUS Act: Background and Scope
The Guiding and Establishing National Innovation for U.S. Stablecoins Act became law on July 18, 2025. Congress passed the bill to create a federal regulatory framework for payment stablecoins, which had previously operated without clear federal rules. The law tasks the FDIC, OCC, Federal Reserve, NCUA, and Treasury with issuing implementing regulations. Agencies must finalize most of these rulemakings by July 18, 2026, exactly one year after enactment.
The GENIUS Act allows insured depository institutions to enter the stablecoin market through subsidiaries. It also permits credit union service organizations to serve as qualifying subsidiaries for credit unions. The law’s stated goals are to support innovation in digital payments, protect consumers, limit illicit finance risks, and address financial stability concerns. The framework reflects growing recognition that stablecoins function more like payment instruments than speculative assets.
The December 2025 Application Procedures Rule
The FDIC’s first GENIUS Act proposal, approved December 16, 2025, focused on how banks apply to issue stablecoins. An FDIC-supervised institution seeking subsidiary approval must submit a letter application to its regional FDIC office. The application requires a proposed stablecoin structure, three-year financial projections, ownership and management details, and felony conviction disclosures for proposed directors and officers. Applicants must also provide policies covering custody, asset segregation, transaction processing, redemptions, and BSA/AML compliance. An engagement letter with a registered public accounting firm for monthly reserve examinations is also required.
The FDIC has 30 days to determine whether an application is substantially complete. After that, the agency has 120 days to approve or deny the application. If the FDIC misses that deadline, the application is deemed automatically approved. The FDIC initially set a 60-day public comment period on this rule, then extended it by 90 days to May 18, 2026, to allow more stakeholder input. The agency evaluated applications on four key criteria: ability to comply with the GENIUS Act, management quality, redemption policy, and overall safety and soundness.
April 2026 Proposal: Operating Standards
The April 7, 2026 proposal addresses how approved stablecoin issuers must actually operate. Key requirements include identifiable reserve assets, redemption within two business days, and tailored capital rules for both the subsidiary issuer and the parent bank. The proposal also outlines permissible and prohibited activities for stablecoin subsidiaries. Chairman Travis Hill stated that the rule “would implement many provisions of the GENIUS Act and offer added clarity on the agency’s stance toward stablecoins and tokenized deposits.”
The FDIC is seeking public comment on 144 specific questions. These cover permissible activities, capital treatment methodology, pass-through deposit insurance eligibility, and the law’s prohibition on stablecoin holders earning yield. The breadth of the comment request signals that the agency views many of these questions as still open. Stakeholders from banks, fintech companies, and consumer groups are expected to weigh in heavily before the comment period closes.
Deposit Insurance and Tokenized Deposits
The April proposal also clarifies how existing deposit rules apply to tokenized products. Deposits recorded in tokenized form qualify as deposits under the Federal Deposit Insurance Act if they meet the statutory definition. The FDIC made clear that deposit insurance treatment does not depend on the technology or recordkeeping system a bank uses. A tokenized deposit earns the same $250,000 federal insurance coverage as a traditional deposit.
However, reserves held to back payment stablecoins receive different treatment. The FDIC stated that deposits held as stablecoin reserves are not insured on a pass-through basis to the stablecoin holders themselves. This distinction matters for consumers. It means that someone holding a bank-issued stablecoin does not automatically receive FDIC insurance on the underlying reserves, even though those reserves sit in an insured institution. The proposal asks for additional comment on how this distinction should be communicated to consumers.
Multi-Agency Coordination and Timeline
The FDIC is not acting alone. The Office of the Comptroller of the Currency published its own GENIUS Act implementation rule in March 2026, covering national banks and federal savings associations. The OCC framework applies to larger issuers, specifically those with stablecoin supply exceeding $10 billion. FDIC oversight applies to smaller issuers below that threshold. NCUA Chairman Kyle Hauptman also announced plans to issue a comparable rule for credit unions following the FDIC vote. The Federal Reserve and Treasury are expected to contribute additional guidance before the July deadline.
This coordinated approach reflects the GENIUS Act’s design. Congress specifically distributed implementation authority across multiple agencies based on institution type and issuer scale. The structure creates parallel but distinct regulatory lanes. Each agency applies the same core GENIUS Act standards, but tailors application and operating requirements to the institutions it supervises. The July 18, 2026 implementation deadline is now less than four months away, adding pressure to finalize these rules quickly.
What It Means for Banks and the Stablecoin Market
The FDIC’s two-proposal approach gives FDIC-supervised banks a clearer path into the stablecoin market than has ever existed under federal law. Before the GENIUS Act, banks faced significant regulatory ambiguity about whether and how they could issue stablecoins. The new framework defines the conditions under which they can proceed. Banks that meet the capital, reserve, and management standards can apply for subsidiary approval and begin issuing stablecoins for use in payments.
The stablecoin market currently sits at over $230 billion in total supply, with most issuance concentrated among non-bank issuers like Tether and Circle. Banks entering this space could shift the competitive landscape. Additionally, the GENIUS Act’s prohibition on yield means bank-issued stablecoins will compete on safety, liquidity, and integration with existing banking infrastructure rather than returns. The comment period running through mid-2026 will shape how strict or flexible the final rules become. Banks, fintech companies, and crypto-native issuers all have significant incentives to participate.
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