FDIC chairman seeks to clarify stablecoins are not covered by deposit insurance

Travis Hill, chairman of the U.S. Federal Deposit Insurance Corporation (FDIC), said that under the GENIUS Act, stablecoin holders will not receive any depositor protection benefits, CoinDesk reported. He plans to propose a new rule to clarify that payment stablecoins covered by the act are excluded from insurance coverage. Hill explained that while the GENIUS Act does not explicitly prohibit this, such a move would align with the spirit of the law. He added that depositor protection through third-party institutions will also not be permitted.