FDIC Chair Says no Deposit Insurance for Stablecoins under GENIUS Act

FDIC Chair Travis Hill confirmed that under the recently passed GENIUS Act, the FDIC will not have the authority to guarantee stablecoin deposits once the law is fully implemented. This means stablecoin issuers will be prohibited from claiming their digital assets are FDIC insured, and the law will stop "pass-through insurance" by third parties. Hill clarified that pass-through insurance would otherwise allow FDIC to insure stablecoin holders' interests if a bank holding the issuer's reserves failed, instead of treating it as a standard corporate deposit account limited to $250,000 coverage. The GENIUS Act, signed by President Donald Trump in July, establishes a regulatory framework for payment stablecoins, with full implementation expected 18 months after signing or 120 days after related agency regulations are finalized. While deposits won't be insured, issuers are still expected to fully back their dollar-pegged coins.

(Source：Cointelegraph)