The acting head of the U.S. Federal Deposit Insurance Corporation said the banking regulator hopes to begin proposing rules for stablecoin issuers before the end of December, according to testimony Travis Hill is preparing to deliver Tuesday to the House Financial Services Committee.
First on the regulator’s agenda to implement the Guidance and Establishment of National Innovation for US Stablecoins (GENIUS) Act: issuing a proposal on how the agency will handle issuers that request federal supervision.
“The FDIC has begun work to promulgate rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our enforcement framework later this month and a proposed rule to implement the GENIUS Act’s prudential requirements for FDIC-supervised payments stablecoin issuers early next year,” according to Hill’s prepared testimony.
The GENIUS Act provides for a number of federal and state entities involved in overseeing the stablecoin sector. After settling the application process, the FDIC, which regulates deposit insurance and supervises thousands of banks, has to draft rules for capital requirements for regulated banks that want to issue stablecoins. It is also responsible for liquidity standards and regulating the quality of reserves that issuers set aside.
A federal agency working on such rules must submit a proposal that is open to public comment for a period of time, typically lasting months. Once the comments are reviewed, the regulator can issue a final version in which the new system is generally set to take effect over a long period of time.
Other agencies, including the Treasury Department, have also been working on their portions of the GENIUS Act obligations.
Hill also touched on other regulatory priorities in his testimony. In light of recommendations from a report from the President’s Task Force on Digital Asset Markets from earlier this year, the FDIC is also “currently developing guidance to provide additional clarity regarding the regulatory status of tokenized deposits,” Hill said.
Tuesday’s House hearing will also hear testimony from other bank and credit union regulators, including the Federal Reserve. In recent years, cryptocurrencies have been a common topic of discussion whenever congressional panels have before them financial regulators.
Federal Reserve Vice Chair of Supervision Michelle Bowman said the central bank was working “to develop capital, liquidity, and diversification regulations for stablecoin issuers as required by the GENIUS Act” in her own prepared testimony.
