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The Federal Deposit Insurance Corporation has issued its first official proposal outlining how banks can obtain approval to issue payment stablecoins, marking the GENIUS Act’s regulatory framework moving from statute to execution.

FDIC Opens Door for Bank Stablecoins With New Approval Framework
The FDIC’s notice of proposed rulemaking, approved by the agency’s board on December 16, lays out a formal application process for FDIC-supervised banks seeking to issue payment stablecoins through subsidiaries. The proposal implements Section 5 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, and effectively draws the regulatory map for how insured banks enter the stablecoin business.
At its core, the proposal establishes a new rule, 12 CFR § 303.252, requiring FDIC-supervised state nonmember banks and state savings associations to apply for approval before launching a payment stablecoin subsidiary. Once approved, those subsidiaries become permitted payment stablecoin issuers, or PPSIs, and fall under FDIC supervision for safety and soundness purposes.
The FDIC makes clear that approval hinges on one central question: whether the proposed stablecoin activity would be safe and sound. Applications can only be denied on that basis, and issuance on open or public blockchains cannot be used as a reason for rejection, a notable nod to crypto-native infrastructure.
Applicants must demonstrate the ability to maintain one-to-one reserves backing outstanding stablecoins, disclose reserve compositions monthly, and submit certified reports reviewed by a public accounting firm. The reserves must consist of liquid assets such as U.S. dollars or short-term Treasuries, and reuse or rehypothecation of those assets is broadly prohibited.

Beyond balance sheets, the FDIC also scrutinizes governance. Applications must disclose ownership structures, directors, officers, and major shareholders, along with confirmations that leadership has not been convicted of financial crimes such as money laundering, fraud, or cybercrime. Competence, compliance history, and managerial integrity are all fair game.
Redemption policies get their own spotlight. Issuers must clearly spell out how stablecoins can be redeemed, what fees apply, and how quickly redemptions are processed. Any changes to fees require at least seven days’ notice, reinforcing the consumer-first posture baked into the GENIUS Act.
The rule sets firm timelines. The FDIC has 30 days to determine whether an application is substantially complete and 120 days to approve or deny it. Miss the deadline, and the application is automatically approved. Denials come with written explanations and appeal rights, including hearings and final determinations within defined windows.
The proposal also estimates modest compliance costs, projecting roughly 80 labor hours per application and about $12,200 per institution. The FDIC assumes roughly ten applications per year, signaling that this framework is designed for early adopters rather than mass issuance—at least for now.
The GENIUS Act itself, signed into law by U.S. President Donald Trump in July, created the first nationwide regulatory structure for stablecoins. It mandates full reserve backing, prioritizes stablecoin holders in insolvency, excludes compliant stablecoins from securities and commodities classifications, and bars misleading claims of government backing-all while stopping short of extending FDIC insurance.
Together, the statute and the FDIC’s proposal mark a decisive shift: stablecoins are no longer hovering in regulatory limbo. For banks, the message is clear-issuance is permitted, but only under rules that look a lot more like banking than crypto improvisation.
Public comments on the FDIC’s proposal will be accepted for 60 days following publication in the Federal Register.
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📅 November 16 | United States
As the global debate on stablecoins enters a decisive phase, the United States has just taken a step that could completely redefine the future of the digital dollar. Quietly, without much fanfare, the Federal Deposit Insurance Corporation (FDIC) has begun to deploy the regulatory framework that will allow financial institutions to issue stablecoins under direct federal supervision.

📖The FDIC Board approved a Notice of Proposed Rulemaking that establishes a formal application process for institutions to issue payment stablecoins through subsidiaries. This decision marks the practical beginning of the implementation of the GENIUS Act, the federal legislation that first created a comprehensive framework for stablecoins in the United States.
As discussed during the Board meeting, interested institutions will be required to submit a detailed application that accurately describes the intended activities, the ownership and control structure of the issuing subsidiary, and an engagement agreement with a registered public audit firm.
The central objective of this process is to allow the FDIC to evaluate the financial soundness, operational security, and associated risks of each proposal before authorizing the issuance of stablecoins.
Nicholas Simons, General Counsel of the FDIC, explained that the proposal seeks a delicate balance: ensuring the security and stability of the financial system without imposing unnecessary regulatory burdens on applicants.
In practice, this means the FDIC wants to oversee these new activities as extensions of the traditional banking system, but adapting the requirements to the specific nature of payment stablecoins.
The context for this initiative dates back to the summer, when President Donald Trump signed the GENIUS Act, a law designed to provide regulatory clarity to one of the most critical segments of the crypto ecosystem.
The law requires stablecoins to be fully backed by U.S. dollars or equivalent highly liquid assets and mandates annual audits for issuers with a market capitalization exceeding $50 billion. It also establishes differentiated rules for domestic and foreign issuers, strengthening federal control over the digital dollar.
In the coming months, the FDIC plans to publish new rules addressing specific capital, liquidity, and risk management requirements for subsidiaries authorized to issue stablecoins.
This phased approach reflects the intention of U.S. authorities to proceed cautiously, yet decisively. Unlike previous regulatory cycles marked by ambiguity and retroactive enforcement actions, the new framework aims to offer predictability to institutions wishing to participate in the stablecoin market within a regulated environment.

Topic Opinion:
Regulation is not the end of innovation, but rather the filter that separates sustainable projects from fragile experiments. The challenge will be ensuring that this framework does not stifle competition or concentrate power solely in large institutions, because the true value of stablecoins lies in their utility, transparency, and trustworthiness.
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