The Federal Reserve Board has proposed a rule that would make banks fully back any stablecoins they issue with permissible reserve assets. The Board announced the plan on September 24 and is taking public comment. Nothing is final: the text is a proposal under the GENIUS Act, the 2025 law that set up federal rules for payment stablecoins.
What the Fed proposes for stablecoin reserves
The Fed put out two proposals that day. The first requires Board-supervised payment stablecoin issuers to fully back their coins with permissible reserve assets, such as short-term Treasury bills and other high-quality, liquid assets. The second sets up an application process for banks that want to issue stablecoins.
The Federal Register notice describes a “one-to-one requirement,” which means each coin outstanding has to be matched by reserves. It adds that the rule must hold across all affiliated entities, so an issuer cannot meet the test by counting assets sitting elsewhere in the corporate family. Stablecoins themselves are not a permitted reserve asset under the proposed section.
The first proposal also sets standardized capital requirements for certain credit and operational risks tied to stablecoin activity. It adds risk-management standards and rules for firms that safekeep the assets behind the coins. A further section spells out which stablecoin activities are permissible for Board-supervised banks.
Who counts as an issuer matters here. The Board’s notice says Board-supervised issuers include subsidiaries of insured state member banks that the Board has approved to issue payment stablecoins. Certain uninsured state-chartered depository institutions moving into the Board’s framework are covered as well.
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The proposed sections run well past the headline requirement. The notice lists separate sections on the reserve requirement, permissible reserve assets, and diversification and concentration limits, plus a redemption-and-fees section. Capital rules cover credit risk, non-reserve financial risks and operational risk.
The Board is asking for public comment on both proposals. The second appears in the Federal Register as application procedures for Board-supervised insured depository institutions seeking approval for a subsidiary to issue payment stablecoins. That wording shows the structure: the bank itself does not issue the coin, a subsidiary does, and the bank applies for approval.
What the application process requires
The second proposal is a tailored application process for Board-supervised banks seeking to issue payment stablecoins. Applicants must submit a business plan and financial information, among other documents. The Board says the process includes appeals, hearings and final determinations on applications.
The Board did not attach a quote from a named official to the release itself. The release carries a media contact line and points to two staff memos. The proposed rule text carries the detail, and the Federal Register notices for both proposals are dated September 29.
The Federal Register notice says the Board may let issuers charge fees tied to purchasing or redeeming a payment stablecoin. That is a cost to the holder, and it sits next to the reserve rule. A coin that is fully backed can still carry a fee at the point someone cashes it in.
Where Governor Barr wants the rule tightened
Governor Michael Barr issued a statement the same day backing the proposal as a step toward stronger guardrails and consumer protections. He wrote that “stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions.” Redemption at par means one coin returns one dollar.
Barr said he is encouraged by the reserve-asset limits and by the transparent, standardized capital requirements. He asked for public input on whether the proposal adequately handles interest-rate and foreign-currency risk. He also wants universal redemption rights stated clearly in any final rule.
He flagged a separate concern too. The Board’s July anti-money-laundering proposal uses a “significant or systemic” standard that would limit when supervisors can act on deficiencies, and Barr wants that addressed in any final stablecoin rule. His statement is that of one governor and does not report a Board vote.
Timing, comments and the GENIUS Act clock
The comment period closes 60 days after publication in the Federal Register, according to the Board. The Federal Register notice lists November 30, 2026 as the date comments must be received. The docket number is R-1899.
The GENIUS Act’s effective date is the earlier of 18 months after enactment on July 18, 2025, or 120 days after the primary federal regulators issue final implementing rules. The 18-month mark falls in January 2027. The proposal is part of the work needed before that date arrives.
The Board is one of several regulators. The proposals apply to Board-supervised issuers, and other federal and state agencies write rules for the issuers they supervise. A reserve rule from the Fed therefore covers part of the stablecoin market, not the whole of it.
For ordinary savers, the practical point is narrow. The proposal sets reserve, capital and redemption standards for issuers. Anyone holding a coin should know who issues it, who supervises that issuer, and whether the coin can be redeemed at par when asked.
Which household costs can be cut while the rule is written?
A stablecoin reserve rule changes who stands behind a digital dollar, but it does nothing for a heating bill, a drug copay or a property-tax notice. Those costs have their own programs, and most of them pay only after someone applies.
This story is about crypto oversight, and The Benefits Checklist covers the related household-cost job. It scans 11 benefit programs, lists the 2026 income limits and includes a 50-state phone directory, with a printable application tracker for keeping each application straight.
Get the Benefits Checklist with 2026 income limits →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
