The U.S. Federal Deposit Insurance Corporation released the first official rule proposal arising from the new law governing stablecoin issuers, and its board of directors voted Tuesday to open a 60-day public comment period on its system for handling requests from its regulated banks seeking to issue stablecoins from its subsidiaries.
The agency, led by Acting Chairman Travis Hill, who is also President Donald Trump’s nominee for the permanent position, will collect comments and review them before it can publish a final rule. Tuesday’s proposal, approved by all three members of the short board, would establish procedures for accepting applications, reviewing them within a 120-day approval window and offering an appeals process for those rejected.
“Under the proposal, the FDIC would adopt a customized application process that would allow it to evaluate the safety and soundness of an applicant’s proposed activities based on statutory factors while minimizing the regulatory burden on applicants,” said Hill, whose nomination could be confirmed as soon as this week by the Senate.
The Guidance and Establishment of National Innovation for US Stablecoins (GENIUS) Act was the first major crypto law passed by Congress and established a complex array of regulators for companies wishing to issue stablecoins, the dollar-pegged tokens vital to transactions in the digital asset sector. For insured depository institutions, the FDIC is the assigned regulator.
Hill said another, more substantial rule will emerge “in the coming months” that will establish the FDIC’s capital, liquidity and risk management requirements for such issuers.
Under the proposed application process, interested institutions would have to submit letters describing their businesses, including financial information, and their plans to conduct a secure and stable issuance.
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