Fed proposes 2 rules to implement GENIUS Act for stablecoin oversight

The U.S. Federal Reserve has proposed two rules to implement the GENIUS Act for oversight of stablecoin issuers, CoinDesk reported. The proposals enter a 60-day public comment period and lay out the legal and supervisory framework for stablecoin issuance. The first proposal sets capital and reserve requirements to ensure stablecoins are sufficiently backed by highly liquid assets, and defines the stablecoin-related activities banks supervised by the Fed may conduct. It also addresses the payment of interest or yield to stablecoin holders, while certain third-party linkage arrangements could be treated as prohibited activities. The second proposal outlines procedures for regulated banks to issue their own stablecoins. Banks would need to submit business plans, financial information, relevant policies and procedures, and other materials. The Fed emphasized stablecoins must be redeemable quickly and reliably at par even during periods of market stress. Rulemaking under the GENIUS Act had originally been due by July this year, but work by the Fed, the U.S. Treasury Department and other relevant agencies has run past the statutory deadline. The Treasury proposed a separate implementation rule in August, while the FDIC and multiple federal agencies have also begun drafting related regulations.