The U.S. Federal Reserve on September 24, 2026, opened public comment on two proposed rules implementing the GENIUS Act, beginning the Board’s formal rulemaking process for payment stablecoinstablecoin issuers and related banking activities under its authority.
One proposal, R-1899, sets out prudential requirements for Board-supervised permitted payment stablecoin issuers. The second, R-1900, establishes procedures for insured State member banks seeking approval to issue payment stablecoins through subsidiaries.
The proposals are not final regulations. Together, they run roughly 452 pages and cover reserves, redemption, reporting, capital, custody, risk management and examinations.
Under the proposed reserve framework, covered issuers would generally have to hold eligible reserve assets with a fair value at least equal to the value of their outstanding payment stablecoins. Eligible assets would include U.S. currency and coin, balances held at Federal Reserve Banks, certain eligible deposits and insured shares, and U.S. Treasury securities with remaining maturities of 93 days or less.
Certain overnight repurchase transactions backed by Treasury securities and specified investment funds would also qualify. Tokenized versions of eligible reserve assets could qualify where they provide legal rights identical to those associated with the underlying non-tokenized assets.
Reserve assets would have to be valued at least daily, with 5 p.m. proposed as the valuation time. The Board is also asking whether issuers should use real-time monitoring of their reserve positions.
Issuers would generally have to satisfy redemption requests within two business days under a public redemption policy. Exceptions are proposed for specified circumstances involving safety and soundness, financial stability, public-interest considerations, certain Bank Secrecy Act or sanctions-related reviews, and events outside an issuer’s control.
Monthly public reserve reports would disclose outstanding stablecoin liabilities, reserve amounts and composition, average maturity or tenor, and the geographic location of reserve custody. A registered public accounting firm would have to examine those reports before publication, while the Federal Reserve would receive quarterly financial reporting and confidential weekly information covering issuance, redemptions, trading activity and reserve assets.
The proposed capital framework includes a 2% risk-based capital requirement for certain uninsured eligible deposit claims and undercollateralized reverse-repurchase exposures. An operational-risk capital component would apply rates of 2% to the first $20 billion of stablecoin issuance, 1.5% to the next $30 billion and 1% to issuance above $50 billion.
The calculation would also include 25% of an issuer’s three-year average revenue from non-reserve assets and an adjustment tied to realized operational losses.
Payment stablecoin issuers would be prohibited from paying holders interest or yield in connection with holding, using or retaining their stablecoins. The proposal also addresses similar benefits provided through affiliated or related third parties.
Federal Reserve Governor Michael Barr raised concerns about the proposed treatment of deficiencies in a stablecoin issuer’s Bank Secrecy Act, anti-money-laundering or sanctions compliance program. In a September 24 statement, he focused on the use of a threshold centered on a “significant or systemic” deficiency.
The rules would also establish minimum custody standards for entities safeguarding reserve assets, payment stablecoins used as collateral and private keys associated with stablecoin issuance. An anti-tying provision would apply to all permitted payment stablecoin issuers, prohibiting an issuer from conditioning a stablecoin-related service on a customer purchasing another product or service from the issuer or its subsidiary, or agreeing not to obtain a competing service.
R-1900 would govern applications from insured State member banks seeking approval for subsidiaries to issue payment stablecoins. Applicants would provide information including a business plan, financial information, policies and procedures, organizational and capital-structure details, relevant biographical information and required certifications. The proposed procedures also address hearings, congressional notification, appeals and final Board decisions.
The Federal Reserve’s proposals follow the GENIUS Act’s July 18, 2026, deadline for implementing regulations. Congress enacted the law on July 18, 2025. Its general effective-date provision points to January 18, 2027, or 120 days after the relevant primary federal payment stablecoin regulators issue final implementing regulations, whichever occurs earlier under the statute.
The Board said comments will be due 60 days after publication of the proposals in the Federal Register. The exact calendar deadline depends on the final publication date.
The Federal Reserve’s economic analysis accompanying the proposals cited stablecoin market capitalization of approximately $317 billion as of April 6, 2026.
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