> ## Content Index > Fetch the complete content index at: https://stablecoininsider.org/llms.txt > Use this file to discover other available public pages before exploring further. # Fed Puts Bank-Grade Rules on Stablecoin Reserves and Opens Comment - URL: https://stablecoininsider.org/fed-genius-act-stablecoin-proposals/ - Published: 2026-09-25T09:34:14.000Z - Updated: 2026-09-25T09:34:14.000Z - Description: Learn what the Fed's two GENIUS Act proposals require: full reserve backing, CEO-certified monthly reports, capital rules, and a bank application pathway. - Author: Milos Djukanovic - Tags: News, Federal Reserve, GENIUS Act The Federal Reserve Board opened public comment on Thursday, September 24, 2026 on two proposed rules implementing the GENIUS Act for the payment stablecoin issuers it supervises. The first covers reserves, capital, risk management, and custody. The second creates an application process for Fed-supervised banks that want to issue stablecoins through subsidiaries. Both notices of proposed rulemaking carry a 60-day comment window that begins when they are published in the Federal Register. Nothing is final, and the details that survive comment are what will actually bind the market. Governor Michael Barr raised concerns about money laundering oversight alongside the proposals. That is the only public friction so far within the Board on the package. > The Fed has decided stablecoins are payment infrastructure rather than a crypto product. Payment infrastructure gets bank-grade rules, and this is what those look like in draft. ### Key Takeaways - The Fed released two GENIUS Act proposals for comment on September 24. - Issuers would have to fully back tokens with permissible reserve assets. - Standardized capital requirements would cover credit and operational risk. - Banks could apply to issue stablecoins through subsidiaries. - The comment window runs 60 days after Federal Register publication. --- ## What the Fed Actually Proposed The first proposal requires stablecoins issued by Board-supervised firms to be fully backed at all times by permissible reserve assets, including short-term Treasury bills and other high-quality liquid assets. It adds standardized capital requirements covering credit and operational risks tied to stablecoin activity, plus broader risk-management standards. It also sets requirements for firms that safeguard reserve assets and clarifies which stablecoin-related activities Fed-supervised banks may conduct. For the largest issuers this codifies what they already claim to do voluntarily, but it removes the discretion. Reserve composition stops being a disclosure choice and becomes a supervisory obligation. The timing is worth noting. Congress failed to advance the CLARITY Act this month, which we covered in our report on the [blocked CLARITY cloture](https://stablecoininsider.org/senate-blocks-clarity-act-cloture-circle-shares/), so the regulatory track is now the only one moving. [![Senate Blocks CLARITY Act Cloture as Circle Shares Slide 9%](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/09/Screenshot-2026-09-25-at-11.26.45.png)](https://stablecoininsider.org/senate-blocks-clarity-act-cloture-circle-shares/) --- ## The Details Most Coverage Skipped Two provisions in the first proposal received almost no attention and matter more than the headline. Issuers would file monthly reserve reports certified by their chief executive and chief financial officer, which puts personal attestation behind the numbers rather than institutional assurance. The second is the breach mechanism. If reserves fall below one-to-one backing, an issuer must notify the Fed and then either restore reserves under a remediation plan or liquidate the reserves and redeem outstanding stablecoins. That second branch is an orderly wind-down clause written into routine supervision. It is the clearest sign the Fed is treating undercollateralisation as a failure event rather than a reporting problem. Reporting discipline of that kind scales all the way down. The same principle applies to any small operation, where free employee [scheduling and time tracking](https://gotrk1.com/o/click/0a34e7a0-7979-4f0b-94e0-9cba6151a0fb/c20ab0e5-fe41-4df3-82e6-b29278e085d9?p%5Fclick%5Fid=[CLICK%5FID]) is usually the first record anyone keeps properly, with payroll and HR layered on later. No card or code required to start. [![Homebase](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/09/Screenshot-2026-09-25-at-11.27.26.png)](https://www.joinhomebase.com/solutions?irclickid=Rgt1oJWMSxyZUoiRNvxgC3hgUkrzZTypVSQDVc0&sharedid=&utm%5Fcampaign=2959690&utm%5Fsource=impact&utm%5Fmedium=affiliate&irgwc=1&afsrc=1) --- ## The Bank Pathway The second proposal builds a tailored application process for Fed-supervised banks seeking approval to issue payment stablecoins through subsidiaries. Applicants would submit a business plan and financial information, and the framework sets out procedures for appeals, hearings, and final decisions. The significance is that it replaces case-by-case ambiguity with a defined route. A bank considering issuance now has something to plan against rather than a negotiation. Some banks have already been testing the ground ahead of the rules. U.S. Bank ran a live transaction on a public chain this month, which we covered in our report on its [USBDC Stellar pilot](https://stablecoininsider.org/us-bank-usbdc-stellar-cross-border-pilot/). [![U.S. Bank Moves USBDC Live on Stellar in Cross-Border Pilot](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/09/Screenshot-2026-09-25-at-11.28.05.png)](https://stablecoininsider.org/us-bank-usbdc-stellar-cross-border-pilot/) --- ## The Agencies Are Not Finished The Fed is one of several regulators building this framework. The FDIC and the Office of the Comptroller of the Currency have already proposed their own implementation rules for the institutions they supervise. Comptroller Jonathan Gould said in August that the OCC expects a final GENIUS Act rule by November. In June, the Fed and other agencies proposed requiring permitted payment stablecoin issuers to operate customer identification programs and to be treated as financial institutions under the Bank Secrecy Act. Treasury issued its own proposed rulemaking on issuance, offer, and sale in August. A firm reading only one agency's proposals is seeing a fraction of the eventual compliance surface. --- ## The Deadline Already Passed The GENIUS Act required US banking regulators and Treasury to implement rules by July 2026\. The Fed acknowledged that agencies have broadly exceeded that deadline while making significant progress, which is an unusually direct admission in a rulemaking release. Key provisions of the law take effect on January 18, 2027\. A 60-day comment window opening in late September leaves a narrow path to final rules before that date. That gap matters because Washington is simultaneously reported to be promoting dollar stablecoins abroad, which we covered in our report on the [overseas dollar push](https://stablecoininsider.org/us-overseas-dollar-stablecoin-push/). The framework being exported is not finished at home. [![Washington Weighs Exporting Dollar Stablecoins to Fund Its Own Debt](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/09/Screenshot-2026-09-25-at-11.28.33.png)](https://stablecoininsider.org/us-overseas-dollar-stablecoin-push/) --- ## What to Watch The comment window is where the real negotiation happens. Issuers, banks, and industry groups will argue over reserve definitions, capital ratios, and how far permitted bank activity extends. Market reaction to the announcement was muted, which fits a proposal rather than an enacted rule. For holders, nothing changes today. Anyone who wants regulated exposure in the meantime does not have to wait for a final rule, and can start at a size where you [invest $5](https://gotrk1.com/o/click/aa0415d8-530d-4b52-88dc-f602512cf15b/299a048f-26a7-4086-8fb6-09bc51ab1f2b?p%5Fclick%5Fid=[CLICK%5FID]) and earn $25\. That route already sits inside a settled framework rather than a draft one. [![Stash](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/09/Screenshot-2026-09-25-at-11.29.15.png)](https://www.stash.com/investing-app/get25?utm%5Fmedium=affiliate-content&utm%5Fsource=goloot&utm%5Fcontent=goloot%5Fpromotion%5Fgetfive&utm%5Fprovider=ImpactRadius&clickid=Rgt1oJWMSxyZUoiRNvxgC3hgUkrzZTXRVSQDVc0&irclickid=Rgt1oJWMSxyZUoiRNvxgC3hgUkrzZTXRVSQDVc0&irpid=2959690&iradid=3880308&utm%5Fcampaign=affiliate-content%5Fgoloot%5Fconversion%5Faccount-create%5Fprospect%5Fweb%5F&irgwc=1&afsrc=1&tgclid=0a010047-15f1-43fd-8100-1a2b6ab63ee3) --- ## FAQs: ### 1\. What did the Federal Reserve propose on September 24, 2026? Two notices of proposed rulemaking implementing the GENIUS Act. The first sets reserve backing, standardized capital requirements, risk management standards, and custody rules for Board-supervised payment stablecoin issuers. The second creates an application process for Fed-supervised banks seeking to issue stablecoins through subsidiaries. ### 2\. What reserve assets would issuers be allowed to hold? Permissible reserve assets including short-term US Treasury bills and other high-quality liquid assets, with full one-to-one backing required at all times. Issuers would file monthly reserve reports certified by their chief executive and chief financial officer. ### 3\. What happens if an issuer's reserves fall short? Under the proposal, the issuer must notify the Federal Reserve and then either restore reserves under a remediation plan or liquidate the reserves and redeem outstanding stablecoins. The second option amounts to an orderly wind-down requirement. ### 4\. How long is the comment period? Sixty days, beginning when the proposals are published in the Federal Register. The Fed will then review submitted comments as part of standard rulemaking before any final rules are issued. ### 5\. When does the GENIUS Act take full effect? Key provisions take effect on January 18, 2027\. The statute had required regulators and the Treasury Department to complete implementing rules by July 2026, a deadline the agencies broadly missed, and the OCC has said it expects its own final rule by November 2026. --- **Disclaimer:** *This content is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice; no material herein should be interpreted as a recommendation, endorsement, or solicitation to buy or sell any financial instrument, and readers should conduct their own independent research or consult a qualified professional.*