The Federal Deposit Insurance Corporation (FDIC) approved and released a Notice of Proposed Rulemaking (NPRM) outlining a framework for how FDIC-supervised banks can apply to issue payment stablecoins through a subsidiary.
This is the first major regulatory step implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law in July 2025. FDIC-supervised insured depository institutions seeking to issue payment stablecoins must submit a formal application for approval.
The process is “tailored” to evaluate the safety and soundness of the proposed activities while minimizing regulatory burden. Stablecoin issuance would occur through a subsidiary, with the FDIC acting as the primary federal regulator for approved entities known as permitted payment stablecoin issuers or PPSIs.
Applications must include details on proposed activities, the subsidiary’s ownership and control structure, business plans, risk management, and an engagement letter with a registered public accounting firm.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
The proposal opens a 60-day public comment period. After reviewing comments, the FDIC will finalize the rule. A separate proposal for prudential requirements like capital, liquidity, and reserve standards is expected early in 2026.
This development follows earlier announcements by Acting FDIC Chair Travis Hill that the agency would propose an application framework by the end of 2025. It represents a shift toward clearer federal oversight of bank-issued stablecoins, aiming to integrate them safely into the banking system.
The FDIC’s, Notice of Proposed Rulemaking (NPRM) marks the first concrete regulatory action under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, enacted in July 2025.
This proposal establishes a tailored application process for FDIC-supervised banks to issue payment stablecoins via subsidiaries, with a 60-day public comment period now open. A follow-up proposal on prudential standards is expected in early 2026.
Regulatory clarity and legitimization of Stablecoins provides a clear federal pathway for banks to enter the stablecoin market, shifting from prior regulatory ambiguity and de facto restrictions. Integrates stablecoins into the regulated banking system, treating bank-issued ones as extensions of traditional activities with FDIC oversight.
Signals U.S. commitment to fostering innovation while prioritizing safety, potentially positioning the dollar-backed stablecoin market as more competitive globally. Applications will be evaluated on safety and soundness, including risk management, business plans, and compliance.
Reserves must be high-quality like cash, short-term Treasuries, reducing de-pegging risks seen in past failures. Stablecoins remain not FDIC-insured, avoiding misrepresentation risks, but bankruptcy protections prioritize holders’ claims on reserves.
Reduces systemic vulnerabilities by preventing liquidity crises through upcoming capital/liquidity rules. Enables banks to issue stablecoins for payments, settlements, and tokenized assets, potentially retaining deposits and competing with nonbank issuers e.g., USDT, USDC.
Attracts institutional capital by eliminating “Wild West” perceptions, boosting participation in DeFi, cross-border payments, and real-world asset (RWA) tokenization. Could lead to bank-issued stablecoins gaining market share, with analysts predicting a multi-year shift toward on-chain banking activities.
Nonbank issuers may face pressure to seek federal charters or partner with banks for credibility. Potential deposit displacement if stablecoins offer yields via third parties, as direct interest is banned, though regulators are monitoring this.
Harmonizes with other agencies (Fed, OCC), creating a unified framework that could accelerate tokenized deposits and blockchain integration. Process adds compliance burden, potentially favoring larger banks. Coordination across regulators needed to avoid fragmentation.
Public comments may push for lighter/heavier rules, delaying finalization. Concerns about concentration if only regulated entities dominate issuance. This proposal is a watershed moment: it bridges traditional finance and crypto, promoting innovation under prudential oversight.
It could drive mainstream stablecoin adoption, strengthen USD dominance in digital payments, and attract significant investment, while mitigating past risks. Final rules, post-comments, will shape the trajectory—expect phased implementation starting mid-2026.