Fed Proposes Reserve Limits and Capital Standards for Stablecoin Issuers

capital standards — The U.S. Federal Reserve has proposed new capital and reserve requirements for stablecoin issuers under legislative authority granted by the so-called GENIUS Act.

The proposals include specific limits on the types of assets that can be held in reserve to back stablecoins and standardized capital requirements for the firms that issue them. The rules aim to establish a federal framework for oversight of the dollar-pegged digital asset sector.

The move follows the passage of the Generative Economic Networks and Infrastructure for User Safety (GENIUS) Act, which granted federal regulators explicit authority over stablecoins. The Fed’s proposal marks a significant step toward formalizing the regulatory treatment of issuers like Circle and Paxos.

The public comment period for the proposed rulemaking will be open for 60 days. The final regulatory framework could significantly impact the operations and compliance costs for companies issuing stablecoins in the United States.