FDIC proposes stablecoin application framework rule as it moves forward with GENIUS Act

The Federal Deposit Insurance Corporation's board of directors approved a notice of proposed rulemaking to establish an application process for institutions wishing to issue payment stablecoins through a subsidiary. FDIC counsel Nicholas Simons detailed that the application must outline proposed activities, the subsidiary's ownership structure, and include an engagement letter with a registered public accounting firm. This proposal aims to allow the FDIC to evaluate the safety and soundness of these activities while minimizing regulatory burden. This action aligns with the implementation of the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), signed into law over the summer, which established a federal framework for stablecoins, including requirements for full backing by U.S. dollars and annual audits for large issuers. The FDIC also plans to propose rules soon covering capital, liquidity, and risk management for approved subsidiary stablecoin issuers.

(Source：The Block)