The acting head of the Federal Deposit Insurance Corporation said the banking regulator plans to begin proposing rules for stablecoin issuers by the end of December, according to testimony prepared by Travis Hill to be presented before the House Financial Services Committee on Tuesday.
First on the agenda for regulators to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is to issue proposals for how the agency would treat issuers that apply for federal oversight.
“The FDIC has begun work on promulgating regulations to implement the GENIUS Act. We plan to issue proposed regulations later this month to establish the applicable framework, and early next year to issue proposed regulations to implement the GENIUS Act’s prudential requirements for payment stablecoin issuers supervised by the FDIC,” Hill’s prepared testimony said.
The GENIUS Act contemplates a series of federal and state entities participating in oversight of the stablecoin sector. After figuring out the application process, the FDIC, which regulates deposit insurance and oversees thousands of banks, will need to create rules regarding capital requirements for regulated banks that wish to issue stablecoins. It is also responsible for regulating liquidity standards and the quality ensured by issuers of reserves.
Federal agencies working on such rules must develop proposals that are open to public comment for a period of time (usually several months). Once the comments have been considered, regulators can issue a final version with the new system set to remain in effect for a generally long period of time.
Other agencies, including the Treasury Department, are also working on some of the mandates of the GENIUS Act.
Hill also touched on other regulatory priorities in his testimony. Building on the recommendations of the President’s Task Force on Digital Asset Markets report earlier this year, the FDIC is “currently developing guidance to further clarify the regulatory status of tokenized deposits,” Hill said.
Tuesday’s House hearing will also hear testimony from other bank and credit union regulators, including the Federal Reserve. In recent years, cryptocurrencies have become a popular topic of discussion whenever financial regulators appear before Congressional panels.
In her prepared testimony, Michelle Bowman, vice chair of the Federal Reserve Board of Governors for Oversight, said in her prepared testimony that the Federal Reserve is committed to “developing capital, liquidity, and diversification regulations for stablecoin issuers as required by the GENIUS Act.”
