Fed opens comment on two stablecoin rules and puts full reserve backing in the first one
Victoria Shinder1 min readThe Federal Reserve Board has requested public comment on two proposals that would establish the regulatory framework for payment stablecoin issuers it supervises under the GENIUS Act. The first requires such issuers to back their stablecoins fully with permissible reserve assets, and the Board names what it has in mind: short-term Treasury bills and certain other high-quality, liquid assets.
This is the supervisory machinery being built out rather than a new policy direction. The GENIUS Act set the structure; these proposals are where the Board fills in what an issuer under its supervision must actually hold and how that will be examined.
What it means
Full backing is the headline, and it is also the least surprising part. The substance is in the word permissible. A reserve requirement is only as strong as the asset list attached to it, and short-term Treasury bills plus high-quality liquid assets is a narrow list by the standards of what stablecoin reserves have historically contained — commercial paper, deposits at institutions of varying quality, and in some cases affiliated obligations.
The practical consequence falls on issuers whose business model depends on reserve yield. A narrow permissible list caps what the float can earn, which means the economics of a Board-supervised issuer look more like a narrow bank and less like a money market fund. That is a deliberate design choice and it is worth naming, because it determines who will want this supervision and who will structure to avoid it. Comment periods are the point at which those arguments get made in writing, so the responses will be more informative than the proposal.