#FDICReleasesStablecoinGuidanceDraft FDIC Releases Draft Stablecoin Guidance, Setting 1:1 Reserve and Two-Day Redemption Rules

The agency’s proposal under the GENIUS Act establishes capital, liquidity, and custody standards for banks issuing payment stablecoins—while making clear that the tokens themselves are not federally insured.

WASHINGTON – April 8, 2026 – The Federal Deposit Insurance Corporation (FDIC) has formally released a draft proposal outlining detailed regulatory requirements for banks and their subsidiaries that issue payment stablecoins, moving the U.S. government’s landmark stablecoin law one step closer to full implementation.

The proposed rule, approved by the FDIC Board of Directors on April 7, establishes five core standards governing reserve management, redemption mechanisms, capital requirements, risk management, and custody protocols. It applies to FDIC-supervised institutions—including insured state nonmember banks and state savings associations—that seek to issue payment stablecoins through separately incorporated subsidiaries known as Permitted Payment Stablecoin Issuers (PPSIs).

The proposal implements provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law in July 2025, which created the first comprehensive federal framework for stablecoin regulation.

Reserves, Redemption, and Capital Rules

Under the draft guidance, stablecoin issuers must maintain reserves equal to at least 100% of the total value of outstanding tokens. Eligible reserve assets are strictly limited to highly liquid instruments, including U.S. coins and currency, Federal Reserve account balances, demand deposits at insured depository institutions, and U.S. government bonds with remaining maturities of 93 days or less.

The proposal also mandates that issuers process customer redemption requests within two business days and establish clear, publicly disclosed redemption policies. In the event that redemption requests exceed 10% of total issuance within a 24-hour period, the issuer must notify the FDIC immediately and cannot unilaterally suspend redemptions without regulatory approval.

Capital requirements under the proposal include a $5 million minimum capital threshold for newly approved PPSIs, which must be maintained for at least three years. Additionally, issuers must hold a separate “operational backstop” equal to 12 months of operating expenses in highly liquid assets, distinct from the 1:1 reserve pool.

No Interest Payments, No Deposit Insurance for Stablecoins

In a critical clarification, the FDIC proposal states that stablecoin issuers cannot pay interest or yield to holders simply for holding or using the token, whether directly or through third-party arrangements. This provision addresses industry concerns about whether rewards programs or yield-bearing stablecoins would be permitted under the law.

Equally significant, the FDIC reaffirmed that payment stablecoins themselves are not eligible for federal deposit insurance. While the underlying reserve deposits held at insured banks may be covered, that protection does not pass through to individual stablecoin holders. The proposal explicitly prohibits issuers from advertising or implying that their stablecoins are backed by the U.S. government or covered by FDIC insurance.

FDIC Chairman Travis Hill, speaking at an American Bankers Association event in March, emphasized the need for regulatory clarity on this point: “In my view, we should answer this question definitively by regulation, rather than waiting until a bank that holds stablecoin reserves fails, when different parties may have different expectations on the availability of FDIC insurance”.

Tokenized Deposits Distinguished

The proposal draws a clear distinction between stablecoins and tokenized deposits—traditional deposits recorded using distributed ledger technology. Tokenized deposits that meet the statutory definition of “deposit” will receive the same deposit insurance protections as conventional bank deposits, the FDIC stated.

Public Comment and Implementation Timeline

The draft rule opens a 60-day public comment period following its publication in the Federal Register, during which the agency is seeking input on 144 specific questions from industry participants and the public. The FDIC has extended the comment period for a related December 2025 proposal on issuer application procedures until May 18, 2026.

The final rule is scheduled to take effect on January 18, 2027, though federal banking agencies are required to complete their rulemaking by July 18, 2026. The Office of the Comptroller of the Currency (OCC) released its own parallel proposal in February 2026, and both agencies are coordinating their approaches under the GENIUS Act framework.

Industry and Legislative Context

The FDIC’s proposal comes as lawmakers on Capitol Hill continue to debate potential refinements to the GENIUS Act, particularly regarding the treatment of yield-bearing stablecoins. The Senate’s Digital Asset Market Clarity Act, still under consideration, could introduce further changes to the regulatory landscape.

Chairman Hill noted that the FDIC is also pursuing related policy changes, including rescinding Obama-era restrictions on nonbank private investors acquiring failed banks and streamlining the “shelf charter” approval process for emergency bank acquisitions.

“The use of stablecoins and tokenized deposits is increasing rapidly thanks to the development of the digital asset market and the Trump administration’s virtual asset inclusion policy,” Hill said following the board’s approval of the proposal.

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