Fed proposes full reserves and capital requirements for supervised stablecoin issuers

WASHINGTON — The Federal Reserve on Thursday unveiled two proposals that would require stablecoin issuers under its supervision to fully back their tokens and maintain substantial capital buffers. The rules are the central bank’s contribution to a coordinated, multi-agency rollout mandated by the GENIUS Act, comprehensive stablecoin legislation signed into law by President Donald Trump in July 2025.

Under the main proposal, payment stablecoin issuers supervised by the Federal Reserve Board would have to back outstanding tokens 1:1 with “permissible assets.” The Fed defines those assets as short-term U.S. Treasury bills and other highly liquid, low-risk government securities, a full-reserve model intended to let token holders redeem stablecoins at par even during market stress.

Stablecoins, which peg their value to a stable asset—most commonly the U.S. dollar—have become a fundamental part of cryptocurrency trading, clearing and cross-border settlement. They allow traders to move funds between digital-asset platforms and traditional bank accounts without exposure to the high volatility of unbacked cryptocurrencies.

The Fed’s first proposal would also set standardized capital requirements to absorb operational, credit and liquidity risks. It would establish formal risk-management guidelines and strict security and operational protocols for third-party financial institutions acting as custodians of stablecoin reserves.

The sector’s growth has also made its largest issuers significant participants in the U.S. government debt market: they have bought tens of billions of dollars in short-term Treasury debt to back their tokens. Financial regulators have warned that a sudden loss of confidence in a major stablecoin could prompt a destabilizing “run,” as investors rush to redeem their tokens. Issuers might then have to sell Treasury holdings rapidly, and a massive, disorderly firesale could disrupt liquidity in broader U.S. money markets and spill into the traditional commercial banking sector.

A second proposal would create a tailored application process for Federal Reserve-supervised commercial banks seeking to issue stablecoins. Applicants would submit comprehensive business plans, operational risk analyses and detailed financial disclosures. The rules would also set standard procedures for administrative hearings, appeals and final regulatory decisions when applications are denied or made subject to conditions.

The public comment period for both proposals will close 60 days after their formal publication in the Federal Register.

The Office of the Comptroller of the Currency is finalizing its own stablecoin guidelines and aims to complete them by November, ahead of a statutory deadline in January. The Treasury Department has proposed parallel regulations that would authorize the government to block cryptocurrency exchanges and digital wallet providers from offering noncompliant stablecoins to U.S. retail and institutional customers.

The regulatory push comes alongside a shift in the federal government’s strategic posture toward digital assets. The Trump administration has increasingly promoted regulated, fully backed stablecoins as a foreign policy and economic tool to extend the global hegemony of the U.S. dollar. Officials aim to counter foreign competitors seeking to establish alternative, non-dollar-denominated digital settlement networks by ensuring digital dollars are backed by U.S. Treasury debt and subject to strict federal oversight.