New U.S. FDIC Rules! Stablecoin reserves have strict requirements and do not receive the $250k per-person deposit protection

FDIC rolls out a stablecoin regulatory framework to implement the GENIUS Act, requiring 1:1 reserves and 2-day redemptions, clarifying that deposit insurance does not apply.

Federal regulatory framework takes shape; FDIC advances GENIUS Act details

The Federal Deposit Insurance Corporation (FDIC) on Thursday (4/7) approved a new rule proposal aimed at banks it supervises and their affiliates that issue and manage stablecoins, establishing the first comprehensive prudential regulatory framework. The move is designed to carry out the GENIUS Act, which was signed into law last year by the Trump administration, marking a key step by the U.S. federal government in overseeing dollar-pegged digital assets.

Under the proposal, the FDIC will define “permitted payment stablecoin issuers” (PPSIs). These entities are expected to operate as affiliates of FDIC-regulated institutions and must meet strict capital, reserve, and risk-management standards.

FDIC Vice Chair Travis Hill said at a board meeting that as stablecoins’ use in payment infrastructure continues to expand, the framework is intended to address potential operational risks and maintain the stability of the financial system. The new rule is the second major regulatory action following last December’s procedures issued by the FDIC for banks to apply—through affiliates—to issue stablecoins.

Meanwhile, the U.S. Office of the Comptroller of the Currency (OCC) also released a corresponding regulatory framework for its supervised institutions in February this year, showing that U.S. federal financial regulators are working toward building a unified stablecoin regulatory regime.

Stringent 1:1 reserve and liquidity requirements to ensure redemptions are executed within two days

In managing reserve assets, the FDIC’s proposal requires that stablecoin issuers maintain full 1:1 reserves, and that these reserves be strictly separated from the issuer’s other business activities. Eligible reserve assets are limited to high-liquidity, low-risk instruments, including: U.S. currency, balances held at Federal Reserve Banks, insured bank deposits, short-term U.S. Treasury securities, and specified overnight repurchase agreements. The issuer must monitor reserve assets daily and undergo periodic audits. In addition, the proposal also sets concentration limits on reserve holdings to reduce exposure to a single counterparty, ensuring sufficient redemption capacity even during periods of market stress.

For the redemption mechanism that investors care about most, the rule sets clear service standards. The issuer must publish a clear redemption policy and should complete redemption requests within 2 business days. To mitigate run-on-demand risks, the FDIC requires that if the amount redeemed in a single day exceeds 10% of the total outstanding amount, the issuer must immediately notify the regulator and may, as appropriate, apply to extend the redemption deadline. This mechanism is intended to provide market transparency while giving regulators early warning, preventing the liquidity problems of an individual stablecoin from escalating into systemic financial risk.

Capital buffers and operating thresholds: strictly separating interest-earnings boundaries

In addition to reserve-asset requirements, the FDIC also sets strict capital and operational requirements for issuers. Within the first 3 years of operation, new payment stablecoin issuers must maintain initial capital of at least $5 million, and the subsequent capital structure should be primarily made up of common equity Tier 1 capital. Beyond statutory capital requirements, issuers must also hold an additional independent liquidity buffer equal to 12 months of operating expenses; this funding is clearly defined as operating reserves distinct from stablecoin reserve funds. Moreover, for large issuers with market value exceeding $50 billion, the FDIC will require more frequent annual reviews and targeted compliance examinations.

Regarding product characteristics, the FDIC draws a red line on the interest-bearing nature of stablecoin returns. The proposal explicitly prohibits issuers from advertising that stablecoin holders can earn interest or profits, and even any reward incentives provided through third-party arrangements would be subject to strict scrutiny. This rule reflects the regulators’ position of treating stablecoins as payment tools rather than savings products. In terms of operational resilience, issuers must establish robust cybersecurity systems covering private key management, blockchain monitoring, incident response, and annual anti–money laundering compliance certifications, ensuring the security and compliance of digital assets at the technical level.

Deposit insurance boundary clarified: stablecoins do not receive pass-through coverage

One of the most important clarifications in this regulatory framework concerns the scope of deposit insurance. The FDIC clearly states that stablecoins issued under this framework themselves are not eligible for standard deposit insurance protection of $250,000 per person. This means that reserves held at banks by issuers will be treated as corporate deposits of the issuer, and token holders do not have individual insurance coverage. This prohibition on pass-through insurance is intended to prevent market misunderstanding that stablecoins carry the same federal backing as bank deposits, thereby maintaining a risk boundary between stablecoins and the traditional financial system.

However, the FDIC also provides different treatment for tokenized deposits. If traditional bank deposits are only presented in a tokenized technology format and still meet the legal definition of bank deposits, they can continue to receive standard deposit insurance treatment. The proposal is currently in a 60-day public comment period. The FDIC is seeking public feedback on 144 specific issues, including capital calibration, eligible assets, and the interest prohibition.

• Related news: U.S. Treasury launches GENIUS Act rule details; stablecoin regulation opens 60 days for public comment

As the mid-2026 implementation deadline set by the GENIUS Act approaches, federal regulators are accelerating efforts to finalize these rules. At the same time, the U.S. Senate is also in final negotiations over the disputes in the CLARITY Act regarding stablecoin yield and rewards, and the full legal codification of stablecoins has become a core issue in U.S. crypto-finance policy for 2026.